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A bond is convertible into common stock for $25. The bond trades at 120 and the stock trades at $32. Which of the following are

A bond is convertible into common stock for $25. The bond trades at 120 and the stock trades at $32. Which of the following are true?

I. The stock trades above parity

II. The stock trades below parity

III. Converting the bond would be profitable

IV. Converting the bond would not be profitable

I & III

II & IV

I & IV

II & III

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