The yield to maturity of a bond with an embedded option, such as a convertible bond. The option-adjusted yield is calculated by removing the effect of the option from the yield, which provides the yield that discounts the cash flows of a non-callable bond.
Related information about option-adjusted yield:
- What is option-adjusted yield? definition and meaning
Definition of option-adjusted yield: The yield to maturity of a bond with an embedded option, such as a convertible bond. The option-adjusted yield is calculated ...
- Option Adjusted Yield - What does OAY stand for? Acronyms and ...
Acronym, Definition. OAY, Option Adjusted Yield. OAY, Oenothera Aster Yellows ( molecular biology). OAY, Outstanding Airman of the Year ...
- Option-Adjusted Spread
Most often, the benchmark is Treasuries. To avoid dependency on a particular benchmark, option-adjusted yield may be quoted instead of OAS: ...
- Option-Adjusted Yield
The expected yield to maturity of a bond or note after adjusting for the probability- weighted impact of an embedded option, usually an issuer's call provision.
- What is OPTION-ADJUSTED YIELD? - The Law Dictionary
Definition of OPTION-ADJUSTED YIELD: The yield of a bond if it held until maturity.
- Fidelity.com Help - Glossary: O
Option Adjusted Yield is calculated by adding/(subtracting) the value of a call option/(put option) to the bond's market price to obtain the price of an otherwise ...
- RMTF - RMM Option Adjusted Spread Definition - Society of Actuaries
(oay = option-adjusted yield or hurdle rate of return). Considerations when setting the hurdle rate are as follows: the riskiness of the stream of future cash flows, ...
- Bonds with Embedded Options - Investment Analytics
Option-Adjusted Yield. ▫ YTM of implied non-callable bond. ▫ Rich-Cheap Analysis of Callable Bonds. ▫ Calculate option-adjusted yield. ▫ Compare to zero ...