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What are Convertible Bonds?

13. What are Convertible Bonds?

1. Fixed-income instruments, usually issued by high-rated companies in the form of a public issue to accumulate long-term capital appreciation.
2. The financial security cannot be redeemed early by the issuer except with the payment of a penalty.
3. Bonds can be redeemed or paid off by the issuer prior to the bonds' maturity date.
4. A fixed-income corporate debt security that yields interest payments.

Answer: D) A fixed-income corporate debt security that yields interest payments

Explanation:

A convertible security is fixed-pay corporate obligation security that yields interest installments, yet can be changed over into a foreordained number of normal stock or value shares. The transformation from the cling to stock should be possible at specific occasions during the bond's life and is for the most part at the watchfulness of the bondholder.