Final answer:
The correct term when a corporation cannot call bonds for a period of 7 years is a 'deferred call'. It is a provision in bond agreements that prevents the issuer from redeeming the bonds before a specific period elapses.
Step-by-step explanation:
When a corporation is prohibited from calling bonds for 7 years, it means that these bonds are not redeemable before a certain period has elapsed, protecting investors from the risk of the bonds being called earlier than they anticipate. In this scenario, since the corporation cannot call the bonds until after seven years have passed, the appropriate term for this type of call is a deferred call. This means that the issuer has agreed to wait a specified number of years before they have the option to buy back the bonds prior to their maturity date. Deferred call provisions are a common feature in bond agreements to give bondholders a period of assured interest income before the issuer can redeem the bonds, often at a premium.