1. Why would a convertible bond increase more in value than a bond that is not convertible?
2. Your brother has asked you to help him with choosing an investment. He has $6,900 to invest today for a period of two years. You identify a bank CD that pays an interest rate of 0.0500 annually with the interest being paid quarterly. What will be the value of the investment in two years?
3. The working-capital line of credit needs to be large enough to exceed the highest month’s forecasted cumulative borrowing.