Convertible bonds yield investment

Total return investment Most convertibles are issued as total return instruments, with the investor considering both the bond yield and the conversion premium on the equity. They will continue to trade like this unless the equity moves strongly either up or down. As a total return investment, the bond will exhibit roughly symmetrical conversion premiums. Its price is sensitive to both movements in the price of the underlying equity and market views on the credit outlook of the company. If the share price rises, the conversion option value increases as the conversion premium decreases, although at a slower rate compared to the equity itself. The reverse occurs if the share price falls, but the bond has downside protection, so as it approaches its bond floor, it outperforms the share and becomes less sensitive to movements in the share price. 

Investors are concerned with the point at which the ratio of the parity of the bond to the investment value moves far above the bond floor. At this point the security trades more like equity than debt, the equity exposure investment we described earlier. The opposite to this is when the equity price falls to low levels, to the point at which it will need to appreciate by a very large amount before the conversion option has any value at this point, the convertible trades as a yield investment. 

In the preparatory phase of glycolysis, ATP is invested to convert glucose to fructose 1,6-bisphosphate. The bond between C-3 and C-4 is then broken to yield two molecules of triose phosphate. 

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