A newly issued bond cannot be called for the first five years after it is issued. This call protection feature would be most valuable to bondholders if during this five-year period, interest rates are generally:

A newly issued bond cannot be called for the first five years after it is issued. This call protection feature would be most valuable to bondholders if during this five-year period, interest rates are generally:

A newly issued bond cannot be called for the first five years after it is issued. This call protection feature would be most valuable to bondholders if during this five-year period, interest rates are generally:



A) stable.

B) rising.

C) falling.

D) fluctuating.



Answer: C) falling.


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