A $1,000 Par Value Bond with a Conversion Price of $20

question 140

Multiple Choice

A $1,000 par value bond with a conversion price of $20 has a conversion ratio of:

• A) $50.
• B) $20.
• C) 50 shares.
• D) 20 shares.

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Definitions:

Utility Function

An economic model that quantifies the satisfaction or happiness a consumer receives from consuming goods and services.

Expected Utility

A theory in economics that models how agents choose among risky alternatives to maximize their satisfaction.

Income

Receipts garnered on a habitual basis as a result of engaging in work or investment.

Von Neumann-Morgenstern

A theory of expected utility which provides axioms for how rational individuals make decisions under uncertainty.