The price sensitivity of a corporate bond to a 100 basis point change in its spread over LIBOR. Because a change in the option-adjusted spread affects the amount of cash flows received by the option holder. A corporate bond option investor maintaining a long position has to decide if the option should be executed because changes in the market price of the bond alters the return on the investment. For example, if the spread between the corporate bond option and Treasuries narrows, the price of the bond may rise to the point at which the option issuer could initiate the call.
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