单选题 Which of the following statements about the call feature is FALSE? The: A. call feature exposes investors to additional reinvestment rate risk. B. call feature lengthens the bond' s duration, increasing price risk. C. cash flow pattern of callable bonds cannot be known with certainty.

【正确答案】 B

【答案解析】A call provision decreases the bond's duration because a call provision introduces prepayment risk that should be factored in the calculation. For the investor, one of the most significant risks of callable (or prepayable) bonds is that they can be called/retired prematurely. Because bonds are nearly always called for prepayment after interest rates have decreased significantly, the investor will find it nearly impossible to find comparable investment vehicles.