Investors often evaluate various factors when considering investments in bond markets. One important aspect is understanding different bond types and their associated risk profiles. For instance, callable bonds allow issuers to repurchase the bond at a predetermined price before maturity, while putable bonds give investors the right to sell the bond back to the issuer at a specified price on designated dates.

Given this context, which type of bond is most likely to see an increase in demand during a declining interest rate environment due to the potential for capital appreciation?