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There is no premium paid to putable bonds. Putable bonds offer a lower coupon than option-free bonds given that they provide a long option to bondholders. As a result, these bonds are not as sensitive to interest rates and when the interest rates decline, they will offer less price appreciation.
On a side note, putable bonds are extremely rare in the market place, which makes it tricky to assess price movements given few data points historically. |
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