Which one of the following statements about convertibles is true?
A) The longer the call protection on a convertible, the less the security is worth.
B) The more volatile the underlying stock, the greater the value of the conversion feature.
C) The smaller the spread between the dividend yield on the stock and the yield-to-maturity on the bond, the more the convertible is worth.
D) The collateral that is used to secure a convertible bond is one reason convertibles are more attractive than the underlying stock.
Correct Answer:
Verified
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