CIMAPRA19-F03-1 Exam - Topic 6 Question 41 Discussion

Actual exam question for CIMA's CIMAPRA19-F03-1 exam

Question #: 41
Topic #: 6

Acompanyhas 8% convertible bonds in issue. The bonds are convertible in 3 years time at a ratio of 20 ordinary shares per $100 nominal value bond.

Each share:

* has a current market value of $5.60

* is expected to grow at 5% each year

What is the expected conversion valueof each$100nominal value bondin 3 years' time?

A$129.6

B$117.6

C$100.0

D$112.0

Show Suggested Answer

Suggested Answer: A

by Reena at May 07, 2022, 02:50 PM

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Adelina

7 months ago

Definitely leaning towards option B, $117.6 sounds right!

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Marge

7 months ago

I think the expected conversion value is around $112.

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Sarina

7 months ago

Wait, how can we be sure the shares will grow like that?

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Tamie

8 months ago

So, if shares grow at 5%, that’s a solid return!

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Kip

8 months ago

The conversion ratio is 20 shares for a $100 bond.

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Deonna

8 months ago

I'm pretty sure this is a false positive alert. The question states there's no active attack, so the IDS must have triggered an alarm incorrectly.

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Reyes

8 months ago

Wait, I'm confused. Is a higher combined ratio better or worse for the insurer? I need to review my notes on this insurance terminology to make sure I have it straight before answering.

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Annette

8 months ago

This question covers a lot of ground. I'll need to review my notes on DRP to make sure I'm considering all the important factors.

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Dona

8 months ago

This one seems pretty straightforward. If the Facebook app isn't installed, the examiner would likely find the artifacts in the device's web browser cache or local storage.

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