@ Choose the correct Answers in fallowing MCQ

5. Duration is influenced by everything except:

a. Maturity b. Market rate of interest c. Coupon rate on the bond d. The issuer of the bond

Answer: ( )

6. What is the conversion ratio of a $1,000 bond convertible at $27 per share? The coupon rate is 10 percent and the market rate 12 percent. This company's common stock is currently trading at $23 per share.

a. 37.04 shares b. 43.478 shares c. 83 shares d. 35.2 shares

Answer: ( )

7. When is the best time to convert a convertible bond to common stock?

a. When the call price exceeds the conversion value b. After the conversion ratio decreases c. When the conversion value is below the pure bond value d. None of the above

Answer: ( )

8. Which of the following is NOT a characteristic of put and call options?

a. They are contracts to buy or sell 100 shares of common stock b. There is always a specified price c. There is always a specified time period to exercise options d. All of the above are characteristics

Answer: ( )