00:01
All right, here we're talking about convertible bonds.
00:04
Convertible bonds.
00:05
Now, there's a principle of bonds that are important, convertible, to help understand this question.
00:14
A convertible bond is one that can convert from one type into another.
00:20
Right? so it can convert from one type to another.
00:31
All right now what does that mean it means it's more flexible right it means that there is less risk because if you can change if you can convert it from one type to another then there's less risk meaning if they if i get in a bind i can just change it from one type of bond into another type of bond now that less risk automatically means not automatically but by principle means less reward less reward.
01:03
High risk, high reward, right? low risk, low risk.
01:06
So because these convertible bonds have less risk because they can convert from one type to another, they have less reward.
01:14
What does that mean? less reward...