ex) 15NC1: Maturities 15 Years, Non-Callable bonds, which can not excise the call rights on the first year
A callable bond is a bond that can be redeemed by the issuer prior to its maturity.
A put bond is a bond that allows the bondholder to force the issuer to repurchase the security at specified dates before maturity.
Since fixed rate bond with option are in backwardation, Black-Derman-Toy(BDT) binominal trees model is used
Using the Interest rate Tree calculated using the BDT Model, we calculate the value of the bonds with options until the present, based on the call or put characteristics of each node.