https://gdpark.blog/tags/callable-bonds/Recent content in Callable Bonds on gdpark.blogHugoenFri, 27 Dec 2024 00:00:00 +0000https://gdpark.blog/posts/cfa-l2-13-bonds-with-embedded-options/Wed, 25 Dec 2024 00:00:00 +0000https://gdpark.blog/posts/cfa-l2-13-bonds-with-embedded-options/A quick rundown of callable vs. putable bonds — who holds the option, why callables are cheaper, and how to back out the embedded option value from the straight bond price.https://gdpark.blog/posts/cfa-l2-14-valuing-bonds-with-embedded-options-part-1/Wed, 25 Dec 2024 00:00:00 +0000https://gdpark.blog/posts/cfa-l2-14-valuing-bonds-with-embedded-options-part-1/We finally put the Binomial Tree Framework to work pricing callable and putable bonds, walking through how cash flows shift at every node as rates move.https://gdpark.blog/posts/cfa-l2-15-interest-rate-volatility-rate-level-and-yield-curve-changes/Wed, 25 Dec 2024 00:00:00 +0000https://gdpark.blog/posts/cfa-l2-15-interest-rate-volatility-rate-level-and-yield-curve-changes/Here’s the breakdown on how volatility, rate levels, and yield curve shape each hit the value of embedded options in callable and putable bonds — exam staples, all three.https://gdpark.blog/posts/cfa-l2-16-option-adjusted-spread-oas/Fri, 27 Dec 2024 00:00:00 +0000https://gdpark.blog/posts/cfa-l2-16-option-adjusted-spread-oas/OAS is the constant spread you add to every node of a risk-free binomial tree until your callable bond price matches the market — and spoiler: it has nothing to do with options.