Question 22 (2 pts. What would happen to the price of the callable bond if the future interest rate volatility was 10% rather than 25%? The price would decrease because lower volatility means that the firm's call option has become more valuable, The price would decrease because lower volatility means the firm is less likely to call the bond. Say the same volatility has no effect on option value The price would increase because lower volatility means that future cash flows are more certain The price would increase because lower volatility means that the form is more likely to call the bond