FINRA Series 7

Category - Series 7

When pricing callable municipal bonds, the “price to call” is based upon which of the following?
  1. in-whole calls
  2. partial calls
  3. sinking fund calls
  4. catastrophe calls
Explanation
Answer: A - in-whole calls. Price to call computations are based upon in-whole calls only. These calls will result in all bondholders being called simultaneously, thus guaranteeing a minimum yield to all.
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