[Verse 1] Companies issue bonds but keep a secret door A callable provision lets them buy back more When interest rates tumble down below their cost They'll redeem early, leave investors at a loss [Chorus] Yield-to-call, calculate the fall When bonds get snatched before maturity's wall Premium prices vanish fast Call protection cannot last Yield-to-worst protects you best Conservative numbers pass the test [Verse 2] Call date approaches like a financial storm Premium bonds face redemption, that's the norm Calculate your yield until that calling day Not to maturity, that's the wrong pathway [Chorus] Yield-to-call, calculate the fall When bonds get snatched before maturity's wall Premium prices vanish fast Call protection cannot last Yield-to-worst protects you best Conservative numbers pass the test [Bridge] Take the lowest yield scenario From call dates to final flow Multiple calculations guard your back Against the issuer's surprise attack [Verse 3] Call premium softens the redemption blow Extra payment when they force you to let go But reinvestment risk still haunts your portfolio Lower rates await, that's how the story goes [Final Chorus] Yield-to-call, calculate the fall When bonds get snatched before maturity's wall Premium prices vanish fast Call protection cannot last Yield-to-worst protects you best Conservative numbers pass the test [Outro] Callable bonds, a double-edged sword Know your yield before you're shown the door
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