Q367
When bonds are called and redeem, they must be ceased to
A.
earn interest
AnswerB.
pay interest
C.
earn floating rate
D.
earn funding rate
Answer: Option A
Solution
Answer: Option A
Solution:
When bonds are called and redeem, they must be ceased to earn interest. Investors who purchase a company's bonds receive interest on the bond and are promised a return on their investment at a future date. The future date is when a bond matures. Usually, the bond issuer repays the bond principal to the investor on the maturity date.