Chartered Financial Analyst Level 2
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78 An analyst gathers the following information about a $1,000 par value convertible bond and the underlying common stock:
-
Current share price of stock: $50
-
Conversion ratio: 25
-
Convertible bond value: $1,290
The bond has risk-return characteristics most similar to:
78 An analyst gathers the following information about a $1,000 par value convertible bond and the underlying common stock:
-
Current share price of stock:
$50 -
Conversion ratio: 25
-
Convertible bond value:
$1,290
The bond has risk-return characteristics most similar to:
Exam-Like
A
a busted convertible bond.
B
the common stock of the company.
C
a straight corporate bond issued by the same company.
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