Ace the Canadian Securities Course 2026 - Rock the CSC Practice Exam!

Get more with Examzify Plus

Remove ads, unlock favorites, save progress, and access premium tools across devices.

FavoritesSave progressAd-free
From $9.99Learn more
Session length

1 / 400

What is a convertible bond?

a bond with an option allowing the bondholder to exchange the bond for a specified number of shares of common stock in the firm.

A convertible bond is a financial instrument that combines the features of a bond and a stock option. This means that the bondholder has the option to exchange or convert the bond into a specified number of common shares in the issuing company. This option provides the potential for increased returns if the company's stock price rises.

Option B is incorrect because a protective provision is a term in a bond agreement that outlines certain conditions that must be met in order to protect bondholders' interests.

Option C is incorrect because this description refers to a sinking fund, which is a way for companies to set aside funds over time for repaying bond debts.

Option D is incorrect because it describes a specific type of government bond issued by the Government of Canada with different maturity options, which is different from a convertible bond.

Get further explanation with Examzify DeepDiveBeta

a protective provision written into the trust indenture of a company's debenture issue.

sums of money set aside out of earnings each year to provide for the repayment of all or part of a debt issue at maturity.

Government of Canada bonds that mature in 3-month, 6-month, or 12-month maturities.

Next Question
Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy