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13- Which of the following characteristics are drawbacks of convertible bonds? Conversion may be forced on the bondholder by call provisions on the convertible bond.
13- Which of the following characteristics are drawbacks of convertible bonds?
Conversion may be forced on the bondholder by call provisions on the convertible bond.
- Downside protection has minimal effectiveness if the bond is bought at a large premium over floor value.
- Interest rates on the debt-instrument part of a convertible bond are frequently below market interest rates.
- All of these options are drawbacks of convertibles.
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