UPSC Civil Services Prelims 2022
Question 15 of 57Indian Economy

With reference to Convertible Bonds, consider the following statements: 1. As there is an option to exchange the bond for equity, Convertible Bonds pay a lower rate of interest. 2. The option to convert to equity affords the bondholder a degree of indexation to rising consumer prices. Which of the statements given above is/are correct?

A1 only
B2 only
CBoth 1 and 2
DNeither 1 nor 2

Correct Answer

The correct answer is hidden

Explanation

21 words hidden ... lower coupon than on comparable straight bonds. - Statement 2 is hidden because the conversion feature provides ... 18 words hidden

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