Question

Bond call provision that is not practiced even after several years of issuance is classified as ______________.

• A. original provision
• B. deferred call
• C. deferred provision
• D. permanent provision

Answer 1

The correct option is B deferred call

If the bond is called, investors are paid any accrued interest defined within the provision up to the date of recall. The investor will also receive the return of their invested principal. Also, some debt securities have a freely-callable provision. This option allows them to be called at any time.