d. Convertible Arbitrage Strategy Violetta Partners is a New York-based hedge fund engaging in convertible bond arbitrage. Portfolio manager Khan is considering a trade involving the convertible bonds and stock of XOR Corporation. She has assembled the following information: XOR Convertible Bond Price (% of par) 120 Coupon (%) 5.0 Remaining maturity (years) 1.0 Conversion ratio 50 S&P Rating BBB Industry Average XOR Corp. Price (per share) 30 -- P/E (x) 30 20 P/BV (x) 2.25 1.5 P/CF (x) 15 10 12. Discuss (using only the information in the table) the basic trade setup that Khan should implement. 13. Demonstrate that potential profits earned are the same whether XOR's share price falls to $24, rises to $36, or remains flat at $30. Fill in the following table and explain the calculations.