A callable bond is a bond that can be redeemed before its maturity date. This basically means that the issuer can call the bond at a predetermined call date if they chose to. If interest rates decline in the market, the value of your callable bond will not rise as much as a regular bond would.

I'm just not sure how to explain it.

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A callable bond is a type of bond that gives the issuer the right to redeem or call the bond before ... View the full answer