Sentences with phrase «callable security prices»
If implied volatility is higher, callable security prices will be depressed.
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Option free bonds have positive convexity; bonds with embedded options, such as callable bonds and mortgage - backed securities, have negative convexity, meaning the graph of the relationship between their price and yield is convex rather than concave.
With a callable security, the investor's compensation for selling the option is reflected in a higher yield and lower price as compared to a similar bullet security with the same maturity.
A callable municipal, corporate, federal agency or government security gives the issuer of the bond the right to redeem it at predetermined prices at specified times prior to maturity.