Gill, Madura. Personal Finance, 4th Canadian Edition 2019. p 358.

enter image description here

I don't know if "put" here is related to put options.


Yes, it refers to a put option. It is like buying an ordinary put on a bond, giving you (the investor) the right to sell at a fixed price (here, face value) by a given date (here, maturity).

Bonus fact: A callable bond, similarly, is one for which the investor has effectively written a call option, giving the borrower the right to buy back the bond at a fixed price. This option is likely to be exercised if interest rates fall.

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.