A sinking-fund redemption bond is a callable bond that must be redeemed in portions over a fixed schedule. In other words, its issuer returns a specific amount of the principal to the bondholder at certain intervals, lowering the total amount it must repay at maturity. ...
a five-year corporate bond will pay interest for five years before it’s redeemable for the face value. Someone buying and holding this bond is guaranteed interest payments for the term of the bond. Unless, of course, it’s a callable bond. ...
In some instances, the face value is the same as the original purchase price. However, in other instances, the face value is the current value of the bond, either at the time of the call or the point of maturity. Always clarify this point before purchasing a callable bond. ...
but the interest you get depends on the interest rate and if it is a coupon or zero-bond. On the other hand, things start to get a little complicated and exciting when we talk about callable bonds.
What is a Global Bond? What is a Callable Bond? Discussion Comments By EliseP — On May 11, 2011 A bond is similar to an I.O.U. This means your lending the government or agency money. Instead of the government or agency writing out a sticky note to you saying how much they need...
is that callable bonds typically offer higher rates than noncallable bonds. However, there is no guarantee that an investor would be able to find a similar rate on a new bond—or even one equal to the current market rate when they buy their callable bond—if their bond is called. ...
Most often, this type of provision ensures that the originator cannot instigate an early resolution to the transaction, at least until the transaction has been in effect for a minimum amount of time. A call protection is common with some bond issues as well as different types of mortgages and...
A baby bond is a fixed income security that is issued in small-dollar denominations, with a par value of less than $1,000. The small denominations enhance the attraction of baby bonds to average retail investors.小额债券是一种以小面值发行的固定收入证券，票面价值低于1000美元。小面额债券增强了...
When the option to extend the maturity is given to the bond investor, the bond is priced as aput bond. If the option to extend maturity lies in the hands of the issuer, the bond is priced as acallable bond. Depending on the specific terms of the extendable bond, the bondholder, the ...
What Is a Bond Option? A bond option is a contract in which the underlying asset is a bond. Like all standard option contracts, an investor can take many speculative positions through either bond call or bond put options. In general, all options, including bond options, are derivative produc...