The feature permits the issuer to repurchase bonds at a stated price prior to maturity, wered 50 Select one O O conversion son b

The correct answer is option c. call.

It is a feature which gives the issuer, the right to call back (that is to repurchase) the bonds at a predetermined price any time before the maturity. Such bonds are called callable bonds.

The issuer has an option whether he wants to use this right or not, that is he may or may not use this right. Generally, the issuer will call back the bonds when the market interest rate falls below the effective interest rate being paid on the bonds. As soon as the market interest rate falls, the price of the bond will rise and when the price will cross the predetermined price, repurchasing the bond (at predetermined price) will be beneficial for the issuer and hence he will exercise his right to repurchase.