Hard call protection

Definition:

Usually refers to callable bonds. The period of time when a bond cannot be called, no matter what the interest rate is. That is, if the interest rate falls sharply, most callable bonds will be called (so the bond issuer can reissue at a lower interest rate). Hard call protection ensures that the holder of the bond can benefit when rates fall.

Investing Essentials


Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

Term of the Day

Hidden load

A sales charge that is not explicitly disclosed or is buried in the fine print of a mutual fund prospectus or life insurance policy and therefore is not immediately apparent.

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