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Which of the Following Statements Are Correct Concerning Convertible Bonds

question 74

Multiple Choice

Which of the following statements are correct concerning convertible bonds?
I.New shares of stock are issued when a convertible bond is converted.
II.A convertible bond is similar to a bond with a call option.
III.A convertible bond should always be worth less than a comparable straight bond.
IV.A convertible bond can be described as having upside potential with downside protection.

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