Which of the Following Statements Is False

question 32

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:

Employment Discrimination

Unfair or prejudicial treatment of employees or job applicants based on characteristics such as race, gender, or age.

Earnings Gap

The difference in average earnings between different groups in the economy, often discussed in terms of gender, race, or education level.

Maximizing Profits

The process by which a business seeks to achieve the highest possible return or profit from its operations.

Employment Discrimination

Unfair or prejudicial treatment of employees or job applicants based on race, gender, age, religion, nationality, disability, or sexual orientation.