Chartered Financial Analyst Level 2
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A convertible bond with a conversion rate of 25 is selling for $948.72. The price of the issuer's otherwise identical option-free bond is $952.65 and the underlying share price is $37.20. The convertible bond is:
A convertible bond with a conversion rate of 25 is selling for $948.72. The price of the issuer's otherwise identical option-free bond is $952.65 and the underlying share price is $37.20. The convertible bond is:
Exam-Like
A
undervalued.
B
fairly valued.
C
overvalued.
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