- CFA Exams
- CFA Level I Exam
- Topic 6. Fixed Income
- Learning Module 30. Valuation and Analysis of Bonds with Embedded Options
- Subject 8. Valuation and Analysis of Convertible Bonds
CFA Practice Question
A forced conversion usually happens when:
A. the interest rate rises significantly.
B. the underlying share price rises above the conversion price.
C. right before a change-of-control event.
Explanation: It is the occurrence of an issuer of a convertible bond exercising the right to call the issue, forcing investors to convert their bonds into common shares.
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