An investor is holding a $1,000 par, 10-year 9% coupon convertible bond with a 9% required bond yield. The bond is convertible into 40 shares of stock. Each share is worth $30. The bond has a current market value of $1,200. If interest rates don't change what is the maximum gain and loss on the bond?

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The Answer of An investor is holding a $1,000 par, 10-year 9% coupon convertible bond with a 9% required bond yield. The bond is convertible into 40 shares of stock. Each share is worth $30. The bond has a current market value of $1,200. If interest rates don't change what is the maximum gain and loss on the bond?

An Investor Is Holding a $1,000 Par, 10-Year 9% Coupon