CFA Institute standards require that convertible bonds be treated as an equity security rather than as a fixed income security in the preparation of composites.

Question

Quizplus · Accepted Answer

Convertible bonds are hybrid securities that have characteristics of both equity and debt. However, CFA Institute standards require that they be treated as equity securities in the preparation of composites because they have the potential to convert into common stock.

CFA Institute Standards Require That Convertible Bonds Be Treated as an Equity