Which of the Following Characteristics Are Drawbacks of Convertible Bonds

question 25

Multiple Choice

Which of the following characteristics are drawbacks of convertible bonds?

• A) downside protection is ineffectual if the bond is bought at a large premium over par value
• B) interest rates on the debt-instrument part of a convertible bond are frequently below market interest rates
• C) conversion may be forced on the bondholder by call provisions on the convertible bond
• D) all of the other answers are correct

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