Which of the following statements regarding callable municipal bonds are TRUE?
Call premiums tend to increase over time.
Call premiums tend to decrease over time.
Call prices are stated as a percentage of the principal amount to be called.
Call prices are stated as a percentage of the market value of the bonds to be called.
A) II and IV.
B) II and III.
C) I and III.
D) I and IV.
Answer: B) II and III.