With reference to Convertible Bonds, consider the following statements: 1. As there is an option to exchange the bond for equity, Convertible Bonds pay a lower rate of interest. 2. The option to convert to equity affords the bondholder a degree of indexation to rising consumer prices. Which of the statements given above is/are correct?
Question:
With reference to Convertible Bonds, consider the following statements: 1. As there is an option to exchange the bond for equity, Convertible Bonds pay a lower rate of interest. 2. The option to convert to equity affords the bondholder a degree of indexation to rising consumer prices. Which of the statements given above is/are correct?
With reference to Convertible Bonds, consider the following statements: 1. As there is an option to exchange the bond for equity, Convertible Bonds pay a lower rate of interest. 2. The option to convert to equity affords the bondholder a degree of indexation to rising consumer prices. Which of the statements given above is/are correct?
Options
Answer: Both 1 and 2
Explanation:
Convertible bonds pay lower interest since they offer equity conversion benefits. They are not indexed to consumer prices, so statement 2 is incorrect.
Explanation:
Convertible bonds pay lower interest since they offer equity conversion benefits. They are not indexed to consumer prices, so statement 2 is incorrect.
👉 Want AI explanation? Open in MCQ App
Recommended articles
- Hppsc Previous Year Questions (2021–2025) Free Practice — Practice HPPSC Himachal Pradesh PSC Prelims Paper 1 Previous Year Questions (2021–2025) online at UPSC Quizroom. Bilingual Hindi-English, AI explanations,…
- Daily Upsc Mcq Strategy — '); animation: float 20s ease-in-out infinite; pointer-events: none; } @keyframes float { 0%, 100% { transform: translate(0%, 0%) rotate(0deg); } 50% {…
- Free Cat Previous Year Questions Guide — Master CAT 2025 with free previous year questions. Practice 1000+ PYQs, mock tests, and detailed solutions. Complete guide to CAT preparation using past…