ACCRUED INTEREST Definition

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ACCRUED INTEREST is interest earned but not paid since the last due date.

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CALL RISK is the risk that a bond will be prepaid before its maturity date, causing the investor to lose future interest payments, which may be at interest rates well above current market rates.

PUTABLE BOND is a bond that contains a provision that allows the holder, or investor, a put option to tender the bond prior to maturity, generally at par. Normally a holding period, often several years, must occur before the put option may be exercised. However, the holder has flexibility, in the event interest rates go up, to tender this bond long before its normal maturity.

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