What is an option free bond?

[y2alk]

Can someone tell me what an option free bond is?

Just a general description would do, don't bother with formulas.

 

[ShaktiRathore]

Hi,
An option free bond is a plain vanilla bond with no option embedded.With option embedded means that there is call feature that is the issuer can call back the bond later before maturity when callable bond price exceeds a predetermined price while in the put option bond the investor can sell before maturity of the bond at a predetermined price.With the options feature the coupon payments are stopped when the bond is called back by issuer or put back by the investor and the value is redeemed at the time of exercising the option.With neither of these options (call and put option) the bond is simply a plain vanilla bond option free bond with the investor redeeming the par value only at maturity with regular coupon payments till the maturity.
Thanks

 

[y2alk]

Thanks ShaktiRathore

 

[jairamjana]

Can someone tell me what an option free bond is?

Just a general description would do, don't bother with formulas.

I know that 2nd line was referring to me..
ShaktiRathore has explained really well. Nothing more to add...