In a Callable Bond?

A callable bond, also known as a redeemable bond, is a bond that the issuer may redeem before it reaches the stated maturity date. ... Callable bonds thus compensate investors for that potentiality as they typically offer a more attractive interest rate or coupon rate due to their callable nature.

What happens when a bond is callable?

Callable or redeemable bonds are bonds that can be redeemed or paid off by the issuer prior to the bonds' maturity date. When an issuer calls its bonds, it pays investors the call price (usually the face value of the bonds) together with accrued interest to date and, at that point, stops making interest payments.

What is a callable bond quizlet?

A bond is callable if the issuer has the right to redeem it prior to its maturity date. Call feature. Part of a callable bond that discloses when the bond can be redeemed and at what price. You just studied 10 terms!