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CFA Level 1
Fixed Income

Benefit of Call Provision in Bonds

Easy Fixed Income Securities Bond Features

When investing in fixed income securities, understanding bond features is crucial. Bonds can have various characteristics, including maturity dates, interest rates, and unique provisions that impact their risk and return profile. One such feature is the call provision, which allows the issuer to redeem the bond before its maturity date.

Which of the following options describes the primary benefit to the issuer when a bond has a call provision?

Hint

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