In General, When a Convertible Security Is Exchanged for Common

question 37

Multiple Choice

In general, when a convertible security is exchanged for common stock, the overall effect is which of the following?
I. Stock shares will decrease.
II. Earnings per share will decrease.

• A) Only statement I is correct.
• B) Only statement II is correct.
• C) Both statements I and II are correct.
• D) Nether statement I nor II is correct.

---

Definitions:

Operant Conditioning

Operant conditioning is a type of learning where behavior is controlled by consequences, including reinforcement and punishment.

Classical Conditioning

A form of learning in which one stimulus is paired with another so that the organism learns a relationship between the stimuli.

Modeling

Modeling is a learning process in psychology where individuals learn behaviors, attitudes, or emotional reactions through observing the behaviors of others.

Cognitive Restructuring

A set of cognitive therapy techniques for changing a person’s maladaptive beliefs or interpretations through persuasion and confrontation.