Bond Pricing Question

marcos · March 5th, 2004, 7:22 am

Hi,I would be very grateful if anyone could tell me if this is correct when it comes to the callable bond, that when the valuation date is equal to the end date then the price of the callable equals the strike. Thanks.callable = reference - call option = reference - max(reference-K,0) = K ?

derivababy · March 5th, 2004, 7:55 pm

Hi Marcos,think u confuse some terms.start looking over this spdshthope this helps