A bond that grants the investor the right to exchange their bonds for common stock,is called a

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A convertible bond is a type of bond that provides the investor the option to exchange their bonds for common stock at a pre-determined conversion ratio. This means that the bondholder has the right, but not the obligation, to convert their bonds into shares of common stock. This feature is appealing to investors because it provides the potential to benefit from both the fixed income payments of a bond and the potential capital gains from owning equity in a company.

A Bond That Grants the Investor the Right to Exchange