All of the below are disadvantages to investing in callable bonds except Disadvantage 1: The price of a callable bond is lower than that of a non-callable, but otherwise identical, bond. None of the provided answers - these are all disadvantages to investing in callable bonds. Disadvantage 3: Since callable bonds are typically called when interest rates are decrease, investors face the risk of having to reinvest the proceeds from the call (i.e. the call price) at the now lower rates. Disadvantage 2: When interest rates decrease, the increase in a callable bond's price is limited and capped by the call price