A ________ is an option included as part of a bond or preferred stock that permits the holder to convert the security into a specified number of shares of common stock.
A) put option
B) stock-purchase warrant
C) conversion feature
D) repurchase agreement

Question

Quizplus · Accepted Answer

A conversion feature is an option included as part of a bond or preferred stock that permits the holder to convert the security into a specified number of shares of common stock. Put options give the holder the right to sell an underlying asset at a specified price, stock-purchase warrants give the holder the right to purchase a specified number of shares of common stock at a specified price, and repurchase agreements involve the sale of a security with an agreement to repurchase it at a later date.

A ________ Is an Option Included as Part of a Bond