Use "oas" in a sentence
oas example sentences
oas
1. With the introduction of bond indices by Lehman Brothers (now Barcap) and others, better quality data have become available, including option-adjusted spreads (OAS)
2. Starting in 1973 we have access to crudely option-adjusted yields (“yield to worst”) and since 1990 to OAS data that also are naturally duration matched
3. While the OAS adjusts for embedded options and for duration mismatches, it remains in various ways an imperfect measure of expected returns—even if the OAS model’s term structure specification and volatility assumption were correct
4. The OAS ignores, on one hand, expected capital losses due to downgrading bias and defaults and, on the other hand, expected gains or losses from rolling along the credit spread curve
5. The yield spread over Treasuries for straight corporate bonds or the OAS for bonds with embedded options reflects (1) the break-even spread needed to offset expected capital losses from defaults and the downgrading bias, and (2) the true risk premium, consisting of the excess return required mainly to compensate for default risk and illiquidity
6. The OAS was originally developed for bonds with embedded options but it is also used for “bullet” bonds with known cash flows
7. For such bonds, the OAS is the size of parallel shift in the reference curve needed to make the bond’s present value using the adjusted curve to match the bond’s market price
8. The OAS takes all bond cash flows into account so that a corporate bond is effectively duration-matched to reference curve assets
9. For bonds with uncertain cash flows, the OAS is calculated using some term structure model and some volatility assumption
10. OAS estimates can differ widely across data providers, depending on model specification and on the assumed level of interest rate volatility
11. The OAS is closely related to credit default swap (CDS) spreads (when both use swaps as the reference curve), but exact calculations differ
12. So does the OAS or the yield spread between a higher yielding bond and a lower yielding Treasury properly capture the expected return advantage of the former? The OAS incorporates the fact that the investor has effectively written an option (or many) to the issuer/borrower
13. If the corporate bond and government bond had the same financing costs, the OAS or yield spread would not only measure the value but also the carry of the long-corporate, short-Treasury position
14. 5%; that I will get 80% of the maximum CPP, and full OAS at age 67; that I will have $9,000 in annual pension income; that I will retire at age 65 and need my savings to support me until age 95; that I will skip savings for 2 years on the assumption that I will have another child
