What is relative form of purchasing power parity theory

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1. A certain convertible bond has a conversion ratio of 50 and a conversion premium of 10?%. The current market price of the underlying common stock is ?$40. What is the? bond's conversion? equivalent?

2. What is the relative form of the Purchasing Power Parity (PPP) theory? What is the rationale behind the relative PPP theory?

3. You are offered an opportunity to purchase a bond with 5.8% annual coupon rate and 21 years remaining until maturity. The coupons are paid annually. With 4.4% yield-to-maturity in mind, what is the price of the bond?

Reference no: EM131993050

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