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respond to this A bond can be called back when the current interest rate drops below the interest rate on the bond, improvement of credit
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A bond can be called back when the current interest rate drops below the interest rate on the bond, improvement of credit rating and call provision. If the call price is higher than the purchase price, the investor will make money. The risk investors make when calling back loans is reinvesting where market rates may be lower causing them to loose money. Example of a company who called back a bond was Apple 2017. They called back 1.8 billion because of lower interest rates.
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