A __________ bond can be paid off early at a specified price.

1 answer:

8 0

A callable bond can be paid off early at a specified period.
There are also other types of bond revenue bond, municipal bond, put bond etc.
A callable bond is also called a redeemable bond. These bonds offer higher coupon rates. We can calculate the price of callable bond by using this formula:
price of callable bond = price of straight bond - price of call option

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