Unformatted text preview: elsewhere. Risks If the company has a severe liquidity crisis, it may not be able to pay when the investor wants to exercise the put option. The investors can only sell the bonds at specific dates, not any time they want to. Price Price of puttable bond = price of straight bond + price of put option....
View Full Document
This note was uploaded on 01/16/2010 for the course FBE 421 at USC.