PRMIA Exam I: Finance Theory Financial Instruments Financial Markets - 2015 Edition 8006 Question # 86 Topic 9 Discussion

PRMIA Exam I: Finance Theory Financial Instruments Financial Markets - 2015 Edition 8006 Question # 86 Topic 9 Discussion

8006 Exam Topic 9 Question 86 Discussion:
Question #: 86
Topic #: 9

[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.]

What is the current conversion premium for a convertible bond where $100 in market value of the bond is convertible into two shares and the current share price is $50?


A.

0.5


B.

1


C.

0


D.

None of the above


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