- CFA Exams
- CFA Level I Exam
- Topic 6. Fixed Income
- Learning Module 28. Valuation and Analysis of Bonds with Embedded Options
- Subject 8. Valuation and Analysis of Convertible Bonds
CFA Practice Question
The minimum value of a convertible bond is the:
B. the bond value + market conversion premium.
C. the maximum value of the conversion value and straight value of the bond.
A. the minimum value of the conversion value and straight value of the bond.
B. the bond value + market conversion premium.
C. the maximum value of the conversion value and straight value of the bond.
Correct Answer: C
It is a floor value. The floor is moving because the straight value is not fixed.
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