Which of the Following Statements Is FALSE

question 23

Multiple Choice

Which of the following statements is FALSE?

• A)A convertible bond can be thought of as a regular bond plus a special type of call option called a warrant.
• B)On the maturity date of the bond,the strike price of the embedded warrant in a convertible bond is equal to the face value of the bond divided by the conversion ratio-that is,the conversion price.
• C)Calling a convertible bond transfers the remaining time value of the conversion option from shareholders to bondholders.
• D)If the stock price is low so that the embedded warrant is deep out-of-the-money,the conversion provision is not worth much and the bond's value is close to the value of a straight bond-an otherwise identical bond without the conversion provision.

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Definitions:

Prostaglandins

A group of lipid compounds that have diverse hormone-like effects, including mediating inflammation and pain.

Epinephrine

A hormone and neurotransmitter, also known as adrenaline, that increases heart rate, muscle strength, blood pressure, and sugar metabolism.

Intracellular Mediator

Substances, often proteins or second messengers, within cells that transduce signals leading to various cellular responses.

Hormone Response

The body's reaction to various hormones, which are chemical messengers that regulate processes in our body.