Answer: decreases over time.

**Explanation:** In a zero volatility environment with an upward sloping yield curve: - **Upward sloping yield curve** means longer-term rates are higher than shorter-term rates - **Zero volatility** means the yield curve remains unchanged over time - **Bond valued near par** suggests the coupon rate is close to current market rates As time passes and the bond approaches maturity: - The bond's remaining life shortens - The relevant comparison rate moves down the yield curve to lower rates - The bond becomes less likely to be called because the issuer would need to refinance at higher rates (due to the upward sloping curve) Therefore, the call risk **decreases over time** as the bond approaches maturity.

Author: LeetQuiz Editorial Team