Conversion value and Forward rate: Difference between pages

Revision as of 10:38, 22 November 2014

1.

Also known as Forward yield.

2.

Today's rate for a forward foreign exchange contract.

3.

The price in any market at which contracts are being struck today for settlement at a preagreed future date.

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-''Convertible bonds''.
+.
-The total current market value of the ordinary shares (or other securities) for which each convertible bond may be exchanged (at the bondholder's option).
+Also known as Forward yield.
-'''Example'''
+.
-Convertible bonds are in issue, each of which may be exchanged for 40 ordinary shares.
+Today's rate for a forward foreign exchange contract.
-The ordinary shares are currently trading in the market at £2 each.
-The conversion value is given by:
+.
-= 40 x 2
+The price in any market at which contracts are being struck today for settlement at a preagreed future date.
-= £80.
 == See also ==
-* [[Convertible bonds]]
+* [[Backwardation]]
+* [[Forward exchange market]]
+* [[Forward fixed rate]]
+* [[Forward margin]]
+* [[Forward yield]]