I am preparing for FRM level 2, but I ran into a question whose answer was confusing to me:
In the answer, it says "all other things remaining the same, the higher the call price, the higher the price of a callable bond." I thought a higher call price is benefit to the seller and harmful to the investor, why does a higher call price lead to a higher callable bond price? Is it because for a callable bond with a higher call price, the seller will have to pay more to the investors, therefore the price of the callable bond with a high call price is higher?
Please correct me my understanding is not correct, thank you so much!