Convertible Bonds

Anyone else finding it really difficult commiting these 7 forumulae to memory? ANyone got an tips on remembering them?

i mess them up all the time - having probs too.

Yeah EVERYTIME!!! It’s strange cos there are like 100’s other formulae which I just look at once and can remember (mostly) but am really strugling with these.

Only saw questions about them once but they make sense to me. Just think of what a convertible is, what you get and when. Then consider what you are giving up (dividends) and then calculate some difference :stuck_out_tongue:

I used to have a diagram that relates all the components of the equation for CB. Then I realize it’s just as confusing as I memorize the equation. So I ended up just memorize them.

For some reason convertible bond functions as well as the Pre/Post VC method calcs all just make intuitive sense. I ignore the equations given in the book completely. (now if only that worked on derivatives!!!)

What equations for convertible bonds are you talking about?