1. Among 4 following statements, which one (s) does not (do not) correspond to a conventional Bond?

1. A conventional bond is a debt.
2. The bondholder has the right to vote in the company.
3. The bonds price has a negative relation with the required return.
4. Offer a fix coupon until maturity.

1. Statement 2 only
2. Statements 1 and 3
3. Statements 2 and 3
4. Statement 1, 2, 3 and 4

1. If we anticipate an increase of the interest rate in the next 6 months, we should buy bonds of which:

a) The coupon rate is high and maturity is close.

b) The coupon rate is low and maturity is close.

c) The coupon rate is high and maturity is far.

d) The coupon rate is low and maturity is far.

1. You just purchased a convertible bond. Today, the strictly debt value is inferior relative to the conversion value. If the required return on the bond increases:

a) The minimum price of the bond will decrease.

b) The minimum price of the bond will increase.

c) The minimum price of the bond remains the same.

d) The strictly debt value of the bond will be superior to the conversion value.

e) It is impossible to make that determination with this information.