Bonds That May Be Exchanged for Common Stock at the Option

question 184

Multiple Choice

Bonds that may be exchanged for common stock at the option of the bondholders are called

• A) options.
• B) stock bonds.
• C) convertible bonds.
• D) callable bonds.

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Definitions:

P(B|A)

The probability of event B occurring given that event A has already occurred.

P(A and B)

The probability of both event A and event B occurring in a combined manner.

P(A or B)

The probability of event A happening, event B happening, or both events happening.

P(A)

Denotes the probability of event A happening.