Question

As the name suggests, convertible bonds allow the owner the option to convert the bonds into a fixed number of shares of common stock. Which of the following are most likely to have higher yields? O Convertible bonds Nonconvertible bonds Consider the case of an investor, Nazim: Nazim wants to include bonds in his investment portfolio, but he wants the option to sell the bond to the issuer at a specified price at a certain date before the maturity of the bond. Which of the following bond redemption features should he pick? O O Putable bond Convertible bond Nazim also recently bought bonds with a clause stating that interest will be paid only when the company has enough earnings to pay for it. Nazim has invested in

Answer 1

Nonconvertible bonds are most likely to have higher yields,

The following bond redemption features he should pick - putable bond

Income bonds.