[According to the PRMIA study guide for Exam 1, Simple Exotics and Convertible Bonds have been excluded from the syllabus. You may choose to ignore this question. It appears here solely because the Handbook continues to have these chapters.]
Which of the following statements relating to convertible debt are true:
I. A hard call protection means the bond cannot be called by the issuer till the share price reaches a threshold
II. It is advantageous for the issuer to call its convertible securities when the share price exceeds the conversion price
III. When the issuer's share prices is very high, the convertible bond trades at a discount to the value of the shares it is convertible into
IV. Convertible bonds generally have to carry a higher coupon than on equivalent non-convertible securities to make them attractive to investors
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