Convertible Bonds Multiple Choice Questions with Answers – PDF Download

MCQ 1: 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

MCQ 2: 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

MCQ 3: 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

MCQ 4: 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

MCQ 5: 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