Convertible Bonds Multiple Choice Questions with Answers – PDF Download

As compared to non-convertible bonds, the yield on the convertible bond is

1. relatively lower
2. relatively higher
3. relatively zero
4. relatively discounted

The value of conversion option to bond holder is $550 and the rate of return on non-convertible bond is $270 then rate of return on convertible bond is

1. 0.0204
2. 2.04
3. 280
4. 820

The value of conversion option to bond holder is $220 and the rate of return on non-convertible bond is $350 then rate of return on convertible bond is

1. 570
2. 130
3. 670
4. 1.59

The value of conversion option to bond holder is $740 and the rate of return on non-convertible bond is $540 then rate of return on convertible bond is

1. 0.0137
2. 1280
3. 1.37
4. 200

The convertible bonds are considered as hybrid bonds because they have properties of

1. debts
2. common equity
3. both debt and equity
4. ordinate and subordinated