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To compensate the bondholders for getting the bond called, the issuer pays is call premium.
A debt security instrument that doesn't pay interest is known as a zero-coupon bond. Zero-coupon bonds are traded at significant discounts and yield their entire face value (par) when they mature.
A bond may contain both call and put options embedded since they are not mutually exclusive. Because the call option increases the value to the issuer, the price of a callable bond is always less than the price of a straight bond. Similar to this, a callable bond's yield is higher than a straight bond's yield.
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