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Convertible Bonds Quiz

Authored by NURHAZRINA RAHIM

Business

University

Used 3+ times

Convertible Bonds Quiz
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10 questions

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1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is a convertible bond?

A bond that pays higher interest rates

A bond that can be converted into cash

A bond that can be converted into stock

A bond that cannot be converted

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

During what period can bondholders convert their convertible bonds into shares?

Only at maturity

Only during market downturns

Anytime after issuance

During the conversion period

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What does the conversion ratio represent?

The interest rate of the bond

The total value of the bond

The number of shares received upon conversion

The number of bonds needed to convert

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

If a convertible bond has a face value of RM100 and a conversion price of RM5, what is the conversion ratio?

15 shares

10 shares

20 shares

25 shares

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the formula for calculating conversion value?

Conversion value = Conversion ratio - Market price

Conversion value = Face value - Conversion ratio

Conversion value = Current market price per share × Conversion ratio

Conversion value = Face value + Conversion price

6.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What happens if a bondholder does not convert their bonds within the conversion period?

They can still convert after the period

They receive a penalty

They get a higher interest rate

They lose their conversion privilege

7.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

How is the conversion premium calculated from the issuer's view?

Face value of bond - market price

Conversion value - market price of bond

Market price of bond + conversion value

Market price of convertible bond - conversion value

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