An Option to Convert a Convertible Bond into Ordinay Shares

question 47

Multiple Choice

An option to convert a convertible bond into ordinay shares is a(n)

• A)embedded derivative.
• B)host security.
• C)hybrid security.
• D)fair value hedge.

---

Definitions:

Social Exchange Theory

A sociological theory suggesting that social behavior is the result of an exchange process aiming to maximize benefits and minimize costs.

Empathy-Altruism Model

A theory suggesting that empathetic concern for others can motivate altruistic behavior, acting out of genuine concern for the welfare of others.

Norm of Reciprocity

A social norm that expects individuals to help those who have helped them, fostering mutual aid and cooperation.

Empathy Gap

The difficulty in understanding or predicting the feelings and needs of others, especially when there is a difference in emotional state or situation.