Final answer:
The major reason for bond issuers to use call provisions is to protect themselves from interest rate risk by allowing them to repay the bond early if market rates decline, thus reducing their interest expenses.
Step-by-step explanation:
The major reason why issuers of bonds include call provisions is b. to protect the issuer from interest rate risk. A call provision allows the issuer of the bond to repurchase the bond before the maturity date, typically at a predetermined price. This feature is advantageous to the issuer, especially when interest rates decline after the bond has been issued.
On the flip side, for a bondholder, being tied to a bond with a call provision can mean they face the risk of having their bond called away when interest rates fall, forcing them to reinvest at lower rates. The call provision mainly serves the interests of the bond issuer, who can manage their financial obligations more effectively in response to changes in the interest rate environment, rather than allowing bondholders to opt out, protecting them from market risk or allowing fair distribution through a lottery.