e39vancity
New member
- Jun 18, 2026
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hi all,
just a quick question to see if anyone else noticed this.
in reading 63, p.267, it states that as interest rates DECLINE, price of an option bond increases; the price of the embedded call option in a callable bond also increases because the call option is more valuable to the issuer
however, in book 6 on p.115 (reading 73), it states that when interest rates are HIGHER, call option prices are HIGHER and put option prices are lower.
am i mis-interpreting the readings or is this contradicting?? please help! =)
thanks in advance
just a quick question to see if anyone else noticed this.
in reading 63, p.267, it states that as interest rates DECLINE, price of an option bond increases; the price of the embedded call option in a callable bond also increases because the call option is more valuable to the issuer
however, in book 6 on p.115 (reading 73), it states that when interest rates are HIGHER, call option prices are HIGHER and put option prices are lower.
am i mis-interpreting the readings or is this contradicting?? please help! =)
thanks in advance