Rate of return on non-callable bonds is added into value of issuer option to calculate

A. return on assets

B. return on callable bond

C. return on non-callable bonds

D. return on equity

Answer: Option B

Solution(By Examveda Team)

Rate of return on non-callable bonds is added into value of issuer option to calculate return on callable bond. A callable bond is a debt instrument in which the issuer reserves the right to return the investor's principal and stop interest payments before the bond's maturity date.