If You Sit in a Boat near the Edge of a River

question 54

Multiple Choice

If you sit in a boat near the edge of a river channel, you might notice the water moving more quickly on the side away from the shore (the channel side) . If you are initially moving with the river, you will be pushed

• A) into the channel because the water pressure is larger on the shore side.
• B) into the channel by the turbulent flow of the water.
• C) toward the shore because the water flow is laminar around the boat.
• D) toward the shore because the water pressure is smaller on the shore side.

---

Definitions:

Conversion Premium

The additional amount above the par value that an investor pays to convert a convertible security (like a bond) into a predetermined number of shares of common stock.

Issuance

Issuance refers to the process of offering new or existing securities for sale to investors, typically as a means to raise capital for the issuer.

Conversion Price

The predetermined price at which convertible security can be exchanged for a specified number of another security, typically shares of common stock.

Convertible Bonds

Convertible bonds are a type of bond that can be converted into a predetermined number of the company's equity shares at certain times during the bond's life, usually at the discretion of the bondholder.