Why Should a Convertible Bond Always Be Valued at More

question 86

Multiple Choice

Why should a convertible bond always be valued at more than its bond value or its conversion value up until maturity?

• A) The bond holder is receiving higher interest rates.
• B) The conversion value does not have an upper bound.
• C) The conversion ratio may be decreased.
• D)The bond does not have to be given up to exercise the option.

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Definitions:

Exporter

A person or entity that sells goods or services produced in one country to another country.

Shoes

Footwear made from various materials, designed to protect and comfort the human foot while doing various activities.

Economic Well-Being

A measure of the financial health and stability of an individual, community, or nation, typically evaluated by factors such as income, employment, and access to resources.

Importer

An individual or company that buys goods from foreign countries for resale in its own market.