difference in curriculum and schewser for convertable bonds.

CFA Level II
#1

schewser: when stock price rises the bond will under perform coz of the conversion premium , this is drawback of investing in convertible bond.

curriculum :convertible bonds do generally rise in value when the issuer’s common stock price goes up.

which one is correct?

#2

Both.

When the stock price rises the value of the convertible bond will also rise, though generally not as much as the increase in the stock price.

#3

thank you!!

#4

You’re welcome.