Explain how an increase in expected interest-rate volatility can decrease the value of
a callable bond.
What will be an ideal response?
From an investor's point of view, they have sold a call option to the firm. The firm will exercise its call option when interest rates fall by enough to make it worth the company's costs to refinance its debt at a lower interest rate. The probability of this fall occurring increases when there is greater volatility in interest rates.
If and when interest rates fall, investors will have to "sell" their bonds back to the firm. If they want to invest the money received in bonds, they will have to purchase bonds with lower coupon payments. Thus, as expected interest-rate volatility increases, then the value of holding a callable fond can decrease.
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A member of the AICPA must safeguard the confidentiality of client information. Which of the following is not a valid reason to disclose information to non-clients?
a. To discuss information relating to inadequate disclosure in an audit report. b. To comply with a validly issued and enforceable subpoena or summons. c. To accommodate the review of client audit work papers under AICPA, PCAOB, or State Board of Accountancy authority. d. To explain to members of the press whether a client is likely to miss payroll in the forthcoming periods.
During which stage in the LMX theory are the supervisor’s expectation central?
*a. role-taking b. role reversal c. role routinization d. role rotation
Most project management software employs AOA diagramming
Indicate whether the statement is true or false
In the command Lock all the building doors, the simple subject is
(a) Lock, (b)building, (c) doors, (d) you.