Q239
As compared to non-convertible bonds, yield on convertible bond is
A.
relatively lower
AnswerB.
relatively higher
C.
relatively zero
D.
relatively discounted
Answer: Option A
Solution
Answer: Option A
Solution:
As compared to non-convertible bonds, yield on convertible bond is relatively lower. At face value, the interest rate on a convertible bond is actually lower than that found on nonconvertible bonds.