If market rates of interest change, the "floor value" of a convertible bond can change.

Name: If market rates of interest change, the "floor value" of a convertible bond can change.
Brand: Quizplus
Rating: 5.0 (33 reviews)

Question

Quizplus · Accepted Answer

The "floor value" of a convertible bond is the value of the bond if it were only a straight bond, calculated using the prevailing market rates of interest. Therefore, if market rates of interest change, the floor value will change, which will affect the value of the convertible bond.

If Market Rates of Interest Change, the "Floor Value" of a Convertible