Analyze the following statements about convertible bonds and callable bonds.

I - The convertible bonds are corporate bonds that gives the bondholder an option to convert each bond owned into a fixed number of shares of common stock at a conversion ratio.

II - Convertible debt carries a higher interest rate because it has an embedded warrant.

III - The price of a callable bond is lower than the price of an otherwise identical non-callable bond.

IV - The yield to maturity of a callable bond will be lower than the yield to maturity for its non-callable counterpart.

Select the alternative in which all statements are correct:

	II and IV
	I and IV
	I and III
	II and III

Answer rating: 100% (QA)

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