As the price of stock rises, the probability a convertible bond will be called declines.

Name: As the price of stock rises, the probability a convertible bond will be called declines.
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Question

As the price of stock rises, the probability a convertible bond will be called declines.​

Quizplus · Accepted Answer

As the price of the stock rises, the value of the convertible feature increases, making it more likely that the bond will be converted into stock. Therefore, issuers are more likely to call the bond to force conversion before the stock price goes even higher.

As the Price of Stock Rises, the Probability a Convertible