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Assume that you had bought a convertible bond with a conversion ratio of 25. Now the stock of this firm is selling for $42. Will
Assume that you had bought a convertible bond with a conversion ratio of 25. Now the stock of this firm is selling for $42. Will you execute this option of conversion? If so, what is the profit do you get when you convert the bond into stocks and sell it in the stock market?
1. | Cannot determine due to the lack of conditions | |
2. | Not executed | |
3. | Executed, and the profit is 680 | |
4. | Executed, and the profit is 50 |
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