Conversion Parity Price

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Dictionary Says

Definition of 'Conversion Parity Price'

The price paid for a share of stock purchased by exercising the option on a convertible security. The conversion parity price is the effective price paid by the investor, and is calculated by dividing the market price of the convertible security by the conversion ratio, which is the number of shares a convertible security can be converted into.
Investopedia Says

Investopedia explains 'Conversion Parity Price'

For example, a convertible bond with a par value of $1,000 and can be exchanged for 20 shares of common stock. The conversion parity price would be $50 ($1,000/20 shares). Investors can limit risk by purchasing a convertible security when the conversion parity price is close to the market price for the common stock, and the price of the common stock is expected to rise in the future.
Search results for

'Conversion Parity Price'

  • Put-Call Parity And Arbitrage Opportunity

    http://www.investopedia.com/articles/optioninvestor/05/011905.asp
    ... below shows the possible profit/loss of a conversion trade when the put-call parity
    is slightly out ... As the gain comes from the price difference, between a ...

  • Introduction To Convertible Preferred Shares

    http://www.investopedia.com/articles/stocks/05/052705.asp
    ... can be sold on the secondary market, and their market price and behavior is determined
    by the conversion premium, the difference between the parity value and ...

  • Series 6 Study Guide - Investment Securities - Corporate Bonds ...

    http://www.investopedia.com/exam-guide/finra-series-6/investment-securities/corporate-bonds.asp
    ... Exam Tips and Tricks You may be asked to calculate three things on the exam: the
    conversion price, the conversion ratio, or the parity price of the stock. ...

  • CFA Level 1 Study Guide - Liabilities - Reporting The Retirement ...

    http://www.investopedia.com/exam-guide/cfa-level-1/liabilities/bond-retirement-conversion-reporting.asp
    ... 4.26 Monetary Policy and Price Level Stability; 4.27 ... Power Parity; 5.19 Relative
    Purchasing Power Parity. ... 9.10 Reporting The Retirement Or Conversion of Bonds; ...

  • Series 65 Study Guide - Stocks and Mutual Funds - Preferred Stock ...

    http://www.investopedia.com/exam-guide/series-65/stocks-mutual-funds/preferred-stock.asp
    ... equals or exceeds $25 a share (also called the parity price). To calculate how many
    shares of common stock would be received upon conversion, the investor ...

  • CFA Level 1 Study Guide - Derivatives - Effect of Cash Flows on ...

    http://www.investopedia.com/exam-guide/cfa-level-1/derivatives/effect-cash-flows-put-call-parity-lower-bounds.asp
    ... 4.26 Monetary Policy and Price Level Stability; 4.27 ... Power Parity; 5.19 Relative
    Purchasing Power Parity. ... 9.10 Reporting The Retirement Or Conversion of Bonds; ...

  • CFA Level 1 Study Guide - Global Economic Analysis - Absolute and ...

    http://www.investopedia.com/exam-guide/cfa-level-1/global-economic-analysis/absolute-relative-purchasing-power-parity.asp
    ... 4.26 Monetary Policy and Price Level Stability; 4.27 ... Power Parity; 5.19 Relative
    Purchasing Power Parity. ... 9.10 Reporting The Retirement Or Conversion of Bonds; ...

  • CFA Level 1 Study Guide - Derivatives - Put-Call Parity ...

    http://www.investopedia.com/exam-guide/cfa-level-1/derivatives/put-call-parity.asp
    ... 4.26 Monetary Policy and Price Level Stability; 4.27 ... Power Parity; 5.19 Relative
    Purchasing Power Parity. ... 9.10 Reporting The Retirement Or Conversion of Bonds; ...

  • CFA Level 1 Study Guide - Global Economic Analysis - Relative ...

    http://www.investopedia.com/exam-guide/cfa-level-1/global-economic-analysis/relative-purchasing-power-parity.asp
    ... 4.26 Monetary Policy and Price Level Stability; 4.27 ... Power Parity; 5.19 Relative
    Purchasing Power Parity. ... 9.10 Reporting The Retirement Or Conversion of Bonds; ...

  • CFA Level 1 Study Guide - Global Economic Analysis - Foreign ...

    http://www.investopedia.com/exam-guide/cfa-level-1/global-economic-analysis/foreign-exchange-parity.asp
    ... 4.26 Monetary Policy and Price Level Stability; 4.27 ... Power Parity; 5.19 Relative
    Purchasing Power Parity. ... 9.10 Reporting The Retirement Or Conversion of Bonds; ...

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