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Convertible securities are subject to all of the following disadvantages except:

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Convertible securities are subject to all of the following disadvantages except:

 Options:

A. interest rates are normally below market rates
B. the convertible is purchased at a premium
C. the holder has no downside protection
D. the convertible may be subject to a call provision

 

The Correct Answer Is:

  • C. the holder has no downside protection

 

Conclusion

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