Which of the Following Characteristics Are Drawbacks of Convertible Bonds

question 102

Multiple Choice

Which of the following characteristics are drawbacks of convertible bonds?

• A) Downside protection is effectual if the bond is bought at a large premium over par value.
• B) Interest rates on a convertible bond are always above market interest rates.
• C) Conversion may be forced on the bondholder by put provisions on the convertible bond.
• D) Interest rates on the debt-instrument part of a convertible bond are frequently below market interest rates.

---

Definitions:

Non-Profit

An organization dedicated to furthering a particular social cause or advocating for a shared point of interest and does not distribute its surplus funds to owners or shareholders.

Personal Use

The use of a property or item by the owner or their family for non-business and non-rental purposes, affecting the tax implications of expenses related to the property or item.

Schedule E

Schedule E is a form used by taxpayers to report income and losses from rental property, royalties, partnerships, S corporations, estates, and trusts on their tax returns.

Schedule A

This refers to a form used by U.S. taxpayers to itemize deductions on their federal income tax return.