Put option on zero coupon bond returns


Put option on zero coupon bond returns


A:A put option on a bond is a provision that allows the holder of the bond the right to force the issuer to pay back the principal on the bond. A put option gives the bond holder the ability to receive the principal of the bond whenever they want before maturity for whatever reason. If the bond holder feels that the prospects of the company are weakening, which could lower its ability to pay off its debts, they can simply force the issuerer to repurchase their bond through the put provision.

Zerk repurchase price is set puut the time of issue, and is usually par value. Of returs, the special advantages of put bonds mean that some yield must be sacrificed.This type of bond is also known as a multimaturity bond, an option tender bond, a variable rate demand obligation (VRDO). JavaScript is disabled on your browser. Please enable JavaScript to use all the features on this page. This page uses JavaScript to progressively load the article content as a user scrolls.

Click the Couponn full text link to bypass dynamically loaded put option on zero coupon bond returns content. View full text.




Returns bond option zero on put coupon

Put option on zero coupon bond returns


Add a comment

Your e-mail will not be published. Required fields are marked *