A Collateral Shock Can Either Increase or Decrease the Value

question 135

True/False

A collateral shock can either increase or decrease the value of collateral,it depends on the circumstances.

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Definitions:

Convertibles

Securities, typically bonds or preferred shares, that can be converted into a predetermined number of common shares at the option of the holder.

Call Protection

An initial period during which a callable bond may not be called.

Conversion Feature

An option within certain bonds or preferred stocks that allows them to be converted into a predetermined amount of the issuer's common stock.