This statement is True. Callable bonds are bonds which allow the borrowers to make repayment of the bond at a specified call price before their scheduled maturity date.
Callable bonds are beneficial for the issuer (borrower) as the issuer has option to choose to redeem the bonds at a lower rate if interest rates decrease. It helps in saving money for the borrower. In contrast, the investor in the callable bond will face the risk of being called away from the bond before the maturity date, potentially losing out on higher interest rates. It could have been earned had the bond not been called.
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