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- 229
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- 2011-7-11
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- 2013-10-12
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The prepayment option is like a call option. It is held by the issuer of the bond (or homeowner in the case of a mortgage loan).
A decrease in interest rate volatility decreases the value of both calls and puts.
Why don't you post the question properly. I don't understand whether you are asking for the effect on the value of the bond, or on the value of just the option embedded int the bond, or on the yield on the bond. Please clarify. |
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发表于 2011-7-11 18:38
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