A convertible bond is a bond that can be:

Multiple Choice

Exchanged for a stated number of shares of common stock of the bond issuer.

Exchanged for cash at prescribed points in time.

Modified from a fixed coupon bond into a floating coupon bond at prescribed points in time.

Submitted to the issuer for redemption at the discretion of the bondholder.

Submitted for payment any time the economy converts into a recessionary period.