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:

Supply Voltage

The electrical potential difference provided by a power source to operate electrical circuits, devices, or equipment, essential for the functioning of electronic systems.

Inductor Current

A measure of the flow of electric charge through an inductor, influenced by the inductor's properties and the circuit it is part of.

Phase

A measure of the position of a point in time on a waveform cycle, often used in the context of alternating electrical currents.

Parallel Circuit

An electrical circuit in which the components are connected in parallel, providing multiple paths for the current.