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Why did convertible bonds perform poorly in 2008

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Why did convertible bonds perform poorly in 2008 and then perform very well in 2009? 

B) Why did convertible arbitrage strategies do poorly in 2008?

C) We have the following information: 

Conversion ratio= 50

Current stock price is 16 dollars per share.

Convertible bond is currently trading at 1000.

Coupon on the convertible bond is 6.0%.

Straight value of bond= 800

Calculate the conversion value, value of the option embedded in the convertible bond, and the market conversion price.

Reference no: EM133204761

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