Which of the following characteristics are drawbacks of convertible bonds?
A) Downside protection is effectual if the bond is bought at a large premium over par value.
B) Interest rates on a convertible bond are always above market interest rates.
C) Conversion may be forced on the bondholder by put provisions on the convertible bond.
D) Interest rates on the debt-instrument part of a convertible bond are frequently below market interest rates.
Correct Answer:
Verified
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