NO.PZ202304070100008401
问题如下：
The minimum value of Bond #9 is equal to the greater of:
选项：
A.the conversion value of Bond #9 and the current value of Bond #10.
the current value of Bond #10 and a call option on Whorton’s common stock.
the conversion value of Bond #9 and a call option on Whorton’s common stock.
解释：
Correct Answer: A
The minimum value of a convertible bond is equal to the greater of the conversion value of the convertible bond (i.e., Bond #9) and the current value of the straight bond (i.e., Bond #10).
Right now the stock price is $30
and the convertible price is $50
the option is out of the money --> which equals option A
I am wondering if the option is in the money --> would we pick option B's definition instead (conversion value of bond 9 and call option on stock)
