Sentences with phrase «interest callable»

Gail's advice is to make an inventory of your debts, make minimum payments on all of your debts and devote all of your extra money to your high interest callable debts.

Not exact matches

Primarily this would occur when there is a drop in interest rates — issuers often redeem the callable bond and issue another one at the new, lower interest rate.

For example, Company A issues callable bonds with an 8 % interest rate.

When rates drop to 6 %, the company calls the bonds, pays each investor his principal and a small call premium, and then issues new callable bonds with a 6 % interest rate.

Issuers of callable bonds may choose to refinance by calling their existing bonds so they can lock in a lower interest rate.

It is important to know if there are any special features or conditions associated with a bond you are considering for investment because that may affect your decision - making and potential income (from interest if it is callable).

Pricing Callable Bonds with Stochastic Interest Rate and Stochastic Default Risk: A 3D Finite Difference Model by David Wang of Hsuan Chuang University (62K PDF)-- 10 pages — February 2005

Discount callables are a better choice when the investor believes volatility will be low but prefers more protection in an environment of rising interest rates.

The CDs are usually callable on each subsequent interest payment date.

Callable CDs pay interest to the depositor at the contractual rate of interest over the life of the CD, BUT they have a «call feature».

Step - Up CDs are callable CDs in which the interest rate increases over the life of the CD to higher rates of interest.

Callable, Step - Up CDs are Certificates of Deposit whose interest rates increase over the life of the CD on a predetermined schedule.

Check to see if you are investing in a callable bond and consider what types of bonds you may want to think about investing in advance to offset any potential decrease in interest income if the bond is called.

Doug Hoyes: So, you've got this list of all of my debts and I'm going to start with whatever the highest interest rate one is, that's callable.

Make a list of your debts, order them from highest to lowest, pay off the callable debts with the highest interest rates first, and keep working until you're done.

Doug Hoyes: So, an example of a callable debt with a high interest rate would be something like a credit card?

Declining interest rates may accelerate the redemption of a callable bond, causing an investor's principal to be returned sooner than expected.

Get rid of the callable debt first because the bank can call that loan at any time which can ruin your credit or jack up the interest rate.

In reality, prices of callable bonds are unlikely to move much above the call price if lower interest rates make the bond likely to be called.

This technique is especially useful for callable and extendible / retractable bonds, whose cash flows depend on future interest rates, or are said to be «path dependent.»

A callable bond is worth less to an investor than a noncallable bond because the company issuing the bond has the power to redeem it and deprive the bondholder of the additional interest payments he'd be entitled to if the bond was held to maturity.

As opposed to the Callable CD, a Bump Up CD gives the depositor the chance to «bump up» or opt for a higher interest rate should there be an increase in CD rates within the lifetime of the CD.

Callable agency bonds with «step up» coupon rates: callable agency bonds that have a pre set coupon rate «step up» that provides for increases in interest rates or coupon rate as the bonds approach maturity to minimize the interest rate risk for investors ovCallable agency bonds with «step up» coupon rates: callable agency bonds that have a pre set coupon rate «step up» that provides for increases in interest rates or coupon rate as the bonds approach maturity to minimize the interest rate risk for investors ovcallable agency bonds that have a pre set coupon rate «step up» that provides for increases in interest rates or coupon rate as the bonds approach maturity to minimize the interest rate risk for investors over time.

The company owns, manages and finances a portfolio of real estate related investments, including mortgage pass - through certificates, collateralized mortgage obligations, Agency callable debentures and other securities representing interests in or obligations backed by pools of mortgage loans issued or guaranteed by Freddie Mac, Fannie Mae and Ginnie Mae.

Callable at any time at the greater of 100.00 or the present value of the remaining scheduled payments of principal and interest.

A characteristic of CMOs and other callable or prepayable securities that causes investors to have their principal returned sooner than expected in a declining interest rate environment, and later than expected in a rising interest rate environment.

Callable bonds are obviously favorable to the municipality and detrimental to investors in periods of falling interest rates.

Callable securities that are at the money — where interest rates are very close to the point where the option will be exercised — have the most sensitivity to changes in market rates and implied volatility.

This means that the market expects interest rates at the time the bond becomes callable will be such that the issuer will not exercise its option.

Prices on callable bonds depend on the market's expectation of interest rates at the time the call feature on a bond becomes active in relation to the coupon rate on the callable bond.

Discount callables would generally be chosen when the investor believes volatility will be low but prefers more protection in an environment of rising interest rates.

U.S. Treasury Securities issued today are not callable, so they will continue to accrue interest until the maturity date.

In addition to interest rate risk, the value of the options embedded in callables is sensitive to changes in the slope of the yield curve.2 The value of the options is a function of forward rates, 3 which are dependent on the spot4 level of rates and spot yield spreads.5

Yields on callable bonds tend to be higher than yields on noncallable, «bullet maturity» bonds because the investor must be rewarded for taking the risk the issuer will call the bond if interest rates decline, forcing the investor to reinvest the proceeds at lower yields.