Series 7 - General Securities Representative Exam
Your client owns some convertible bonds in ABC Corporation. The common stock is currently trading above parity. What should your client do?
Convert to stockA
Do not convert to stockB
Buy preferred stock & keep the convertible bondsC
Buy warrants and do not convert to stockD
For convertible bonds, converting is always profitable with the stock is trading above parity. There is no data to indicate if he should buy preferred stock or warrants