Reading 24_Fixed Income Active Management : Credit Strategies_Option Adjusted Spreads
In example 3 of CFA notes and p.305 on Schweser notes stated that,
a bond with embedded put option would likely to have its OAS exceeds the Z-spread, while a bond with embedded call option would likely have its OAS below the Z-spread.
Why is that?
I don’t understand the explanation stating “OAS exceeds the Z-spread because it captures the potentially favourable impact of the put feature on the investor’s return.”
Why a favourable feature will cause OAS exceeds the Z-spread? Shouldn’t it be the other way?