00:04
So we are asked to find a bond that you can convert to shares at a future date, right? and we need to find out given four options, which one it is.
00:16
So a says a zero coupon bond.
00:19
Now, a zero coupon bond simply put is a bond which pays zero coupons.
00:24
So it means that the only money that you receive is the redemption amount at the end of the period.
00:30
So there are no coupons.
00:32
Let's say if it's a 10 -year coupon bond.
00:34
During the 10 years, there's no money you're receiving, right? so there's nothing about converting.
00:41
So i'd say this is not correct, right? then part b says a government bond.
00:47
Now, as the name says, a government bond is simply a bond that is issued by the government, right? nothing about it says it can be converted to shares, especially it being from a government.
01:00
You probably can't convert to shares in the government because the government is not a company, right? and then c says a convertible bond.
01:09
Now, a convertible bond is the name says you can convert it to shares, right? so i would say that this is the answer.
01:20
D says a debensure...