Duration of a callable zero bond

Discussion in 'P2.T5. Market Risk (25%)' started by Hend Abuenein, Apr 27, 2012.

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  1. Hend Abuenein Active Member

    Hi Aleksander: My post #19 was @David, we wrote simultaneously you and I.

    The same problem with the same dimensions exists everywhere.

    Thank you.
    Hend Abuenein, May 23, 2012
    #21
    • Like Like x 1

  2. Aleksander Hansen Well-Known Member

    Good luck Hend!
    I hope everything works out - and for someone as hard-working as yourself, it tends to do - even if things can be tight or difficult at times.
    Aleksander Hansen, May 23, 2012
    #22
    • Like Like x 3

  3. Hend Abuenein Active Member

    Thank you for sharing that Aleksander :)
    Much appreciated the chin ups :)
    Hend Abuenein, May 23, 2012
    #23
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  4. rony_frm New Member

    An issuer will call a ZCB only if the interest rates become zero or negative. I mean forget bond rates, equations etc for a moment. What does calling a ZCB mean. lets day its a 10 year bond and after 6 years Iam analysing at it. if I have to pay my bond holder 100$ 4 years from now, will will I call the bond and pay them 100 now??? I can keep that 100 in bank and earn interest for next 4 years. I will call only if I cannot earn interest or If I have to pay the bank for keeping the money.( UBS did it in 2011 in switzerland for some types of deposit accounts).
    Otherwise no point in calling the bond now.
    rony_frm, May 24, 2012
    #24
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