- CFA Exams
- CFA Level I Exam
- Topic 6. Fixed Income
- Learning Module 42. Fixed-Income Securities: Defining Elements
- Subject 5. Bonds with Contingency Provisions
CFA Practice Question
A bond indenture of Felton Corp. specifies that the 8% issue due in June, 2020 is redeemable at par value in the event of a merger. The bond is callable after December 31, 2014 at 103. In the event of a merger between Felton Corp. and a suitor company, owners of this issue will receive ______.
A. the market price
B. par value
C. 103% of par value
Explanation: Owners will receive par value because of the provision specified in the bond indenture.
User Contributed Comments 5
| User | Comment |
|---|---|
| danlan | Callable at par value. |
| myanmar | no danlan not callable at par value, but redeemable because of the special bond indenture. |
| CoffeeGirl | redeemable at par value, so, it's redeemed at par. |
| cong | redeemable at par, callable at 103. |
| reganbaha | All of the callable info is just extra BS to confuse you in order to make sure you know your stuff. Lots of CFA questions like this, learn how to handle them. |