Which One of the Following Statements Related to Convertible Bonds

question 13

Multiple Choice

Which one of the following statements related to convertible bonds is correct?

• A)Bondholders forego higher coupon rates in exchange for the conversion option.
• B)Convertible bonds are generally issued such that the conversion value is equal to the par value.
• C)The conversion price is equal to the bond's market value divided by the conversion ratio.
• D)The conversion value is equal to the bond's market price multiplied by the conversion ratio.
• E)Bonds should be converted as soon as the conversion value exceeds the face value.

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Definitions:

Depressive Personality Disorder

A personality disorder characterized by chronic feelings of sadness, emptiness, and emotional instability.

Clusters

Groups of personality disorders. DSM-IV-TR lists 10 personality disorders in three clusters: (A) odd and eccentric disorders (paranoid, schizoid, and schizotypal); (B) dramatic, emotional, or erratic disorders (antisocial, borderline, histrionic, and narcissistic); and (C) anxious and fearful disorders (avoidant, dependent, and obsessive-compulsive).

DSM-5

The Diagnostic and Statistical Manual of Mental Disorders, Fifth Edition, is a standardized classification of mental disorders used by mental health professionals.

Clusters

Groups of similar objects, subjects, or events that are placed together based on certain criteria or characteristics.