Effectively, the borrower's right to prepay a loan in whole or in part without a penalty is a put option.

Name: Effectively, the borrower's right to prepay a loan in whole or in part without a penalty is a put option.
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The borrower's right to prepay a loan without a penalty is more accurately described as a call option, not a put option, because it gives the borrower the right but not the obligation to "call away" or repay the debt before its maturity.

Effectively, the Borrower's Right to Prepay a Loan in Whole