Which of the following is a good reason to invest in convertible bonds?
A) They often have higher than normal coupon rates.
B) They offer protection against rising interest rates.
C) They tend to be issued by stable, low-risk companies.
D) They offer predictable income and a chance to profit from an increase in the stock price.

Question

Quizplus · Accepted Answer

Convertible bonds offer a fixed income like regular bonds but also give the investor the option to convert the bonds into a predetermined number of shares of the issuing company, potentially allowing the investor to profit from an increase in the stock price.

Which of the Following Is a Good Reason to Invest