CFA Practice Question

There are 490 practice questions for this study session.

CFA Practice Question

What is NOT an advantage convertible bonds offer from the issuer's perspective?
A. Reduced interest expense
B. The elimination of debt when market interest rates fall significantly
C. The elimination of debt when the conversion option is exercised
Explanation: Bond issuers cannot call convertible bonds when interest rates fall.

User Contributed Comments 2

User Comment
nmech1984 I don;t understand the explanation. Any help? Why bond issuers cannot call convertible bonds when IR fall?
nmech1984 because the bonds are convertible rather than callable?
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