- CFA Exams
- CFA Level I Exam
- Topic 6. Fixed Income
- Learning Module 2. Fixed-Income Cash Flows and Types
- Subject 2. Fixed-Income Contingency Provisions
CFA Practice Question
A clause in the indenture of Convex Incorporated's 10-year coupon bonds specifies that they are exchangeable for the common stock of the company at a ratio of 10 shares per $1,000 par value.
B. This clause makes the bonds refundable.
C. This clause makes the bonds convertible.
A. This clause makes the bonds callable.
B. This clause makes the bonds refundable.
C. This clause makes the bonds convertible.
Correct Answer: C
A convertible bond can be exchanged for another asset per terms of the bond indenture.
User Contributed Comments 3
| User | Comment |
|---|---|
| woori | by definition |
| robbiecow | and I thought it was by magic! |
| khalifa92 | hahaha, you're so funny you should be a comedian instead. |