Anatomy of convertible bonds

1/24/02

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Table of Contents

Anatomy of convertible bonds

Review of convertible formulas

PPT Slide

PPT Slide

Conversion premium

Break even calculations

Break-even calculations (cont’d)

Weaknesses of break-even analysis

Bond investment value

Estimation of the discount rate

Duration

Duration analysis applied to convertibles

Duration and coupon

PPT Slide

PPT Slide

Correlation with interest rates

Pricing simple convertible bonds

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PPT Slide

PPT Slide

Contingent claim approach

PPT Slide

Author: Yue-Kuen Kwok 

Email: maykwok@ust.hk

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