Correct answer: B

Bond IV is callable, so it contains an embedded call option that is valuable to the issuer. Because of that embedded option, a callable bond must trade at a lower price than an otherwise similar non-callable bond. Therefore, statement B is false.

Why the other statements are true:

• A is true: Callable bonds can exhibit negative convexity at lower yields because as yields fall, the likelihood of being called rises, limiting further price appreciation.
• C is true: The conversion price is: $$\text{Conversion price} = \frac{\text{Par value}}{\text{Conversion ratio}} = \frac{1000}{20} = 50$$
• D is true: The conversion option is valuable to the investor, so the convertible bond typically offers a lower yield than a comparable non-convertible debenture.

So the false statement is B.