The price at which the callable bond will be redeemed from the bondholder is called ______. A. Par value B. Call value C. Face value D. Redemption value

The correct answer is: B. Call value

A call value is the price at which a bond issuer may redeem the bond from the bondholder before the bond matures. The call value is usually set at a premium to the bond’s face value, which is the amount that the bondholder will receive when the bond matures.

A call provision gives the bond issuer the right to call the bond, or redeem it early, at a specified price. This can be done for a number of reasons, such as if interest rates have fallen and the issuer can issue new bonds at

If a bond is called, the bondholder will receive the call value, which is usually higher than the face value of the bond. However, the bondholder will not receive any interest payments for the remaining time until the bond would have matured.

Here is a brief explanation of each option:

• Par value is the face value of a bond, which is the amount that the bondholder will receive when the bond matures.
• Face value is the same as par value.
• Redemption value is the price at which a bond issuer must redeem a bond from the bondholder at maturity. The redemption value is usually equal to the bond’s face value.