Disadvantage to the Investor of a Convertible Bond-Multiple Choice Question
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Question
A disadvantage to the investor of a convertible bond is that
A.the stock price may never rise above conversion price.
B. if interest rates rise, the pure bond value (floor price) will decline.
C. the interest rate on convertibles is generally one-third below the coupon rate on straight bonds of similar risk.
D. all of these are disadvantages
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