Understanding Callable Bonds

In the world of fixed income securities, bonds are a common investment choice. Understanding the features of bonds is crucial for investors looking to diversify their portfolios. One key feature that distinguishes different types of bonds is whether they are callable or non-callable. A callable bond gives the issuer the right to redeem the bond before its maturity date under specified conditions. This characteristic can affect an investor's yield expectations and overall investment strategy.

Which of the following describes a feature of a callable bond?