call risk

Call risk

The combination of cash flow uncertainty and reinvestment risk introduced by a call provision.

Call Risk

A risk that a callable bond will be repaid early and that the money earned may not be able to be reinvested in a security with a comparable return. Suppose one invests in a callable bond with coupon payments of 4%. However, interest rates fall and the issuer calls the bond and pays the par value. The investor may make a profit, but now he/she may only purchase a bond with a coupon of 2.5%. Most callable bonds include call periods in the indenture, protecting the bondholder from this risk for a certain period of time. Call risk is one of the most common kinds of reinvestment risk.

call risk

See prepayment risk.

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Basically, this new method, which we call risk accounting, adapts the management accounting system so that the information typically attached to a transaction when it's registered in a bank's system (product, customer, market segment etc) is complemented by information on risk that's triggered when the transaction is accepted.

Thinking: how can the financial services industry improve its approach to risk management?

Developing a functional portfolio that complements your core business entails looking at duration risk, call risk, liquidity risk extension risk just to name a few basic metrics.

Navigating through the low-rate shoals

I regard myself as part of a movement we call risk literacy.

Academics call for introduction of 'risk literacy' for school students

Often, when I have discovered them struggling with risk mitigation, I have asked, "Why didn't you call risk management?

Hooray for hurricanes

Risk management is fundamental to our business, so our entire executive staff address many of the items that you would call risk management as key areas of focus," Sandhu says.

Innovation in the New Economy

In particular, they are designed to protect against call risk for 1 0 years or so and to return principal in a way that can be predicted.

Investing to lower your tax bite; there are moneymaking ways to stop Uncle Sam from gorging on your profits

The Fund also is subject to prepayment and call risk and extension risk to varying degrees.

Nationwide Funds Launches Nationwide Inflation-Protected Securities Fund

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Other risks, including inflation risk, call risk, and pre-payment risk, also apply.

Lazard Asset Management Launches Global Fixed Income Mutual Fund

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Construction of Aadarsh Eklavya Awasiya Vidhyalaya Including Internal Electrification and Development Works

The Funds' underlying securities may be subject to call risk, which may result in the Funds having to reinvest the proceeds at lower interest rates, resulting in a decline in the Funds' income.