As compared to non-convertible bonds, the yield on the convertible bond is _________?
Correct answer: A. relatively lower
- A. relatively lower
- B. relatively higher
- C. relatively zero
- D. relatively discounted
Explanation
Convertible bonds normally offer investors the additional benefit of converting into shares, so investors accept a lower yield than on otherwise comparable non-convertible bonds. The conversion feature makes the lower return attractive.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? support@testustad.com
About Business Finance
Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
Practise Business Finance
975 free Business Finance MCQs from Management Sciences, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Exams that ask Management Sciences questions like this
Management Sciences is on 2 papers prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for every one of them.
More Business Finance questions
The interest rate on floating rate Eurobonds is paid
The financial instruments such as treasury bonds and notes have
The rules and regulations placed on bond holders and bond issuers are classified in _________?
The principal value of TIPS is increased or decreased and is based on the measure of __________?
The rate of return on non-callable bonds is added into value of issuer option to calculate
The bonds issued by corporations for relatively longer term are classified as