Which bond type allows investors to redeem their investment early or not at all?

The correct answer is an irredeemable bond. Irredeemable bonds, also known as perpetuity bonds, do not have a maturity date, meaning that the principal is never repaid. Investors who purchase these bonds receive periodic interest payments, but they cannot redeem their investment for the principal amount at any point. This structure is designed to provide a steady income stream without the obligation for the issuer to repay the principal, allowing the bond to essentially last indefinitely.

In contrast, callable bonds allow the issuer the right to redeem the bond before its maturity date, which provides flexibility to the issuer but not to the investor. Redeemable bonds typically allow the investor to redeem the bond early, while convertible bonds primarily offer the option for bondholders to convert their bond into a predetermined number of shares of the issuing company’s stock. Therefore, these other types of bonds do not align with the characteristics that define irredeemable bonds.