Respuesta :
The correct option is (a) true
It is true that when a bond is called, the investor faces the prospect of reinvesting the funds at a lower rate.
What is a bond?
A bond is a loan made to the bond issuer by the bond buyer or bondholder. When they require money, corporations, governments, and local governments all issue bonds. When a person purchases a government bond, they are lending money to the government. When a shareholder purchases a corporate bond, the shareholder is effectively lending the company money. A bond, like a loan, has a maturity date when the principal is repaid along with periodic interest payments.
You can still lose money even if the issuer gives you a bonus when the bond is called. Additionally, your portfolio may suffer if you are unable to reinvest the money at a similar rate of return.
Therefore, it is true that when a bond is called, the investor faces the prospect of reinvesting the funds at a lower rate.
To know more about bonds, visit: https://brainly.com/question/23490950
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