A convertible bond has face value of 1000 and conversion

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A convertible bond has a face value of $1,000 and the conversion price is $60 per share. The stock is selling at $25 per share. The bond pays $85 per year in interest and is selling in the market for $945. It matures in 7 years. Market rates are 10% annually.

(I) What is the conversion ratio?
(II) What is the conversion value?

If a $100,000 Treasury bond futures contract changes by 5/32, what is the dollar change?

Reference no: EM13477467

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