A Convertible Bond Has an Option Value Which Is Equal

question 47

Multiple Choice

A convertible bond has an option value which is equal to:

• A)the market value of the convertible bond minus the straight bond value.
• B)The market value of the convertible bond minus the conversion value.
• C)the market value of the convertible bond minus the conversion premium.
• D)the market value of the convertible bond minus the maximum of the straight bond value or conversion value.
• E)None of the above.

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