question archive If you are comparing between two bonds that are similar in every other aspect except for the callable feature, which bond would sell at a higher price: the one with callable feature or the one without callable feature? Why?
If you are comparing between two bonds that are similar in every other aspect except for the callable feature, which bond would sell at a higher price: the one with callable feature or the one without callable feature? Why?
Subject:FinancePrice:2.86 Bought3
If you are comparing between two bonds that are similar in every other aspect except for the callable feature, which bond would sell at a higher price: the one with callable feature or the one without callable feature? Why?
Purchase A New Answer
Custom new solution created by our subject matter experts
GET A QUOTE
Answer Preview
Non callable bond would comment a higher price. Please note price and yields are inversely related. Thus a callable bond will have a higher yield compared to a non-callable bond. Reason? Callable bond give the issuer the privilege to call the bond before maturity and that would come at a cost i.e. higher yield
