The events would make it more likely that a company would call its outstanding callable bonds market interest rates to raise sharply. Thus the correct option is D.
A callable bond is a form of bond that gives the issuer the option to continue holding the bond until it is cashed, it usually happens before the bond's maturity date.
An interest rate refers to the rate at which the borrower receives money from the lender and has to repay the amount at the rate charged by the lender in order to provide funds.
When market interest rates tend to decline in the future, callable bonds are likely to be considered. Companies choose to issue callable bonds over non-callable bonds primarily in order to protect themselves in the event that interest rates fall.
Therefore, option D is appropriate.
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