A bond that lets the HOLDER shorten its term by redeeming early at par is:
A bond that lets the HOLDER shorten its term by redeeming early at par is:
Answer
Retractable
Options - A. Retractable - B. Callable - C. Extendible - D. Convertible Why - A. Correct — the holder’s option to retract; valuable when rates have risen. - B. Callable is the ISSUER’s option to redeem early — the neighbour with the same effect on term and the opposite owner. - C. Extendible is the holder’s option to LENGTHEN, not shorten. - D. Convertible swaps the bond for shares; it does not change the term.
Bigel, Introduction to Financial Analysis (CC BY 4.0) §13.6 — covenant shape only; OpenStax, Introduction to Business (CC BY 4.0) §16.6 — convertible/callable shape only; retractable and extendible are CSC register (verified-facts §2.7 G06); original debenture