Please, explain to me why anyone would ever buy a REVERSE convertible bond? - reverse convertible bonds
Is not it almost certain the money if the conversion takes place to lose?
in which the issuer of the exchange rate determined at the time of conversion, on the basis of the underlying shares at market price?
Wednesday, January 20, 2010
Reverse Convertible Bonds Please, Explain To Me Why Anyone Would Ever Buy A REVERSE Convertible Bond?
1 comment:
Pay the market price premium to its fair value, taking into account the interest on bonds * and * the risk of an adverse early conversion. Sure, the fair value of bonds is lower than the price for someone who has the same characteristics, apart from the possibility of early conversion.
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