For bonds with embedded options (for
example callable or puttable bonds), the duration measure must be adjusted to account for the fact that the bond's embedded options may change the expected cash flows of the bond.
For bonds with embedded options (for
example callable or puttable bonds), the duration measure must be adjusted to account for the fact that the bond's embedded options may change the expected cash flows of the bond.
Not exact matches
For
example, if the stock is
callable at $ 100 and the shares are trading very close to that (say, at $ 99), the likelihood that the stock will be called soon is much higher than if the stock were trading at $ 89 (further away from the strike price).
For
example, Company A issues
callable bonds with an 8 % interest rate.
Doug Hoyes: So, an
example of a
callable debt with a high interest rate would be something like a credit card?
For
example, if the stock is
callable at $ 100 and the shares are trading very close to that (say, at $ 99), the likelihood that the stock will be called soon is much higher than if the stock were trading at $ 89 (further away from the strike price).