Final answer:
A call account is managed by a bond trustee to redeem bonds early, providing flexibility and control over the redemption process.
Explanation:
Call account is the term used to describe an account that a bond trustee manages for the sole purpose of redeeming bonds early. It allows the issuer (borrower) to pay off the bonds ahead of schedule, providing flexibility and control over the bond redemption process.
For example, callable bonds give the issuer the option to redeem the bonds early if interest rates decline, saving money on interest payments. The call account serves as a dedicated fund for this purpose, ensuring timely bond redemptions.
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