Convertible bonds tend to pay better interest rates than straight bonds, since convertibles are of lower risk.

Name: Convertible bonds tend to pay better interest rates than straight bonds, since convertibles are of lower risk.
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Convertible bonds pay lower interest rates than straight bonds because of the convertibility factor. Investors are willing to take the lower rates in the hope of price appreciation through common stock performance.

Convertible Bonds Tend to Pay Better Interest Rates Than Straight