SIE Exam Question 533: Answer and Explanation

Question: 533

The difference between a bond's price and the conversion parity price is referred to as which of the following?

• A. Bond premium
• B. Conversion premium
• C. Discount price
• D. Option premium

Correct Answer: B

Explanation:

The difference between a bond's price and the conversion parity price is referred to as the conversion premium.