QUESTION 51 Chase buys a convertible bond with a conversion ratio of 25. If the conversion...
QUESTION 51
-
Chase buys a convertible bond with a conversion ratio of 25. If the conversion value is presently $806.25, what is the value of the stock?
a. $30.25.
b. $32.25.
c. $25.00.
d. $806.25.
QUESTION 52
-
Robin purchased a call option on an “index” of stocks. She can only exercise the option on one specific date, six months from now. Robin bought a:
a. Short European option.
b. Long American option.
c. Short forward contract.
d. Long European option.
Homework Answers
51
| Conversion value = Conversion ratio*current share price |
| 806.25 = 25*Current share price |
| Current share price = 32.25 |
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QUESTION 51
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