Which of the following is/are true about callable bonds? I. Must always be called at par II. Will normally be called after interest rates drop III. Can be called by either the bondholder or the bond issuer IV. Have higher required returns than non-callable bonds

option II and IV

Will normally be called after interest rates drop and Have higher required returns than non-callable bonds are true about callable bonds

Explanation:

A callable bond is a kind of bond that grants the issuer of the bond with the power, but not the responsibility, to cover the bond ere its maturity term. These bonds frequently happen with specific stipulations on the call choice. Callable bonds may be propitious to the bond issuers if interest rates are suspected to befall.

Callable bonds imply a tremendous prospect for investors. If the bonds are covered, the investors will dissipate some future interest returns. Due to the more endangered nature of the bonds, they perform to arise with a premium to remunerate investors for the added peril.

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