Question
Bond A is a convertible bond with a conversion ratio of 20. Bond B is identical to Bond A except that it does not includes
Bond A is a convertible bond with a conversion ratio of 20. Bond B is identical to Bond A except that it does not includes a conversion option. The minimum value of Bond A is equal to the ___.
the max of the conversion value of bond A and the current value of bond B.
the max of the current value of bond B and the value of the call option on the underlying common stock.
the max of the conversion value of bond A and the value of the call option on the underlying common stock.
the min of the conversion value of bond A and the value of the call option on the underlying common stock.
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Applied International Finance
Authors: Thomas J O'Brien
1st Edition
1606497340, 9781606497340
