Bond holder can make profit by returning bonds and exchanging with other securities if market value with conversion value

Answer: Option D

Bond holder can make profit by returning bonds and exchanging with other securities if market value with conversion value exceeds market value of bond. In exchange, the company pays an interest “coupon” (the annual interest rate paid on a bond, expressed as a percentage of face value) at predetermined intervals (usually annually or semiannually) and returns the principal on the maturity date, ending the loan.