Convertible bonds give the investor the option to buy the firm's stock in exchange for the value of the underlying bond.

Question

Quizplus · Accepted Answer

Convertible bonds have a feature that allows the investor to convert the bond into shares of the issuing company's stock at a predetermined price, giving them the option to participate in any potential appreciation in the stock price. Therefore, the statement is true.

Convertible Bonds Give the Investor the Option to Buy the Firm's