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When a Bond Matures, an Investor Will Convert If the Market

question 62

True/False

When a bond matures, an investor will convert if the market price of the convertible bond is higher than the conversion price of the bond.


Definitions:

Nearest Tenth

Rounding to the closest tenth means adjusting a number to one decimal place.

Decimal

A number that includes a decimal point to represent a fraction of a whole.

Percentage

A way of expressing a number as a fraction of 100, denoted by the symbol %.

Lowest Terms

A fraction in which the numerator and denominator have no common factors other than 1, making it the simplest form of the fraction.

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