Essentially, a convertible bond is a portfolio of: a. a bond and an a

Essentially, a convertible bond is a portfolio of:

a. a bond and an automobile whose top can be removed.
b. an otherwise equivalent nonconvertible bond and shares of the issuing firm’s stock.
c. an otherwise equivalent nonconvertible bond and a call option on the firm’s stock.
d. an otherwise equivalent nonconvertible bond and a put option on the firm’s stock.

ANSWER

C