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Fundamental
Callable Bond
Issuer can redeem early; usually offers higher yield as compensation
Definition
A callable bond allows the issuer to redeem the bond before maturity, typically when interest rates decline. To compensate investors for this risk, callable bonds offer higher yields than non-callable bonds. Call protection periods provide some safety for investors.
Related Topics
#fixed income
#call risk
#yield
#redemption
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Category: Fundamental
Fundamental analysis examines a company's financial health, management quality, and market position to determine intrinsic value.
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