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TRUE OR FALSE Suppose a convertible bond is issued at par value of $1,000 and is convertible into 40 shares of a firm's stock. Further,
TRUE OR FALSE
- Suppose a convertible bond is issued at par value of $1,000 and is convertible into 40 shares of a firm's stock. Further, suppose the bond is zero coupon and interest rate=0. If current stock price is $20 per share, the option to convert the bond is profitable.
- A fixed-income security can pay variable income stream to owner of the security.
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Derivatives Markets
Authors: Robert L. McDonald
2nd Edition
032128030X, 978-0321280305
