Call risk

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Revision as of 04:47, 3 August 2013 by imported>Doug Williamson (Spacing)
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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