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Quantitative Finance · Glossary

What is Convertible bond?

Definition 21.1 Derivatives and Volatility · Chapter 21 — Convertibles and the Credit-Equity Link

A convertible bond is a bond that its holder may exchange for a fixed number of the issuer’s shares, at any time or during set periods, instead of receiving coupons and principal; it usually also gives the issuer the right to call it and sometimes the holder the right to put it.

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