
Fundamentals of Options 235
E X A M P L E 1 1 . 4
Greater India Corporation issued a bond on June 5, 2007, with a coupon rate of 8% and a maturity of
10 years. e face value of the bond was INR 1,000, and it had a call provision as follows:
Call price INR 1,060
Date of rst call: January 1, 2010, and callable only on that date
is means that the Greater India Corporation has the option to buy the bonds back from the bondhold-
ers by paying INR 1,060 per bond on January 1, 2010. In this option, the exercise price is INR 1,060 and
the exercise date is January 1, 2010.
11.1.5 Put Bonds
A bond with a put provision attached to it is called a pu ...