Securities issued as debt but intended by the issuing company to be exchanged for shares by the investor prior to maturity are called:
A) hybrid securities
B) discount bonds
C) options
D) convertible debt

Question

Quizplus · Accepted Answer

Convertible debt refers to securities that are issued as debt with the intention of being converted into shares by the investor before maturity. This allows the investor to benefit from any potential increase in the company's stock price while also providing some protection in the form of a fixed income stream. Hybrid securities, discount bonds, and options may have different characteristics and purposes, but they do not necessarily involve conversion to shares before maturity.

Securities Issued as Debt but Intended by the Issuing Company