Which of the following statements about convertible bonds is true?
A)A convertible bond cannot have a sinking fund.
B)A callable bond cannot have a convertible feature.
C)A convertible bond can also have a call feature.
D)A convertible bond must have a sinking fund.

Question

Quizplus · Accepted Answer

A convertible bond can also have a call feature. Choice A is incorrect because convertible bonds can have sinking funds, but it is not a requirement. Choice B is incorrect because a callable bond can have a convertible feature, though it would likely result in a lower coupon rate to compensate for the added flexibility. Choice D is incorrect because convertible bonds are not required to have a sinking fund.

Which of the Following Statements About Convertible Bonds Is True