Option-adjusted spread, Financial Management

The Option-Adjusted Spread (OAS) is a measure of the yield spread (expressed in basis points) which can be used to convert differences between the values and the prices. It is thus basically used as a tool to reconcile value with market price. Since the cash flows of the callable bonds are adjusted to reflect the embedded option, the resulting spread is called option adjusted spread.

Posted Date: 9/8/2012 6:33:42 AM | Location : United States







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