A Convertible Bond Is One Where

question 80

Multiple Choice

A convertible bond is one where

• A)the issuer can convert from a fixed interest rate to a floating rate.
• B)the issuer can convert the bond from long-term to short-term.
• C)the issuer can retire the bond before its specified maturity date.
• D)the bondholder can convert the bond into common stock at a future time.

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Definitions:

Maturity Date

The specified date on which the final payment of a loan, bond, or other financial instrument is due to be paid.

Note Receivable

A written promise that a customer will pay a fixed amount of money with interest by a certain date.

Interest

The charge for borrowing money or the compensation for lending money, typically calculated as a percentage of the principal amount.

Note Receivable

A promissory note held by the lender, stating the money due to be paid back by the debtor.