Call risk

From ACT Wiki
Revision as of 14:12, 23 October 2012 by imported>Administrator (CSV import)
(diff) ← Older revision | Latest revision (diff) | Newer revision → (diff)
Jump to navigationJump to search

The risk to a lender/investor from the potential calling - for early redemption - of a callable bond. It gives the investor the unexpected problem of re-investing their money returned early. So if interest rates have fallen the investor will receive a lower than expected return, for the unexpired term of the original (callable) bond.

See also