Series 7 Exam Prep Convertible Bonds & Convertible Preferred Stock.

00:01 Introduction and preview
08:02 When given the conversion price establish the conversion ratio.
10:25 Convertible preferred
13:02 Calculating parity
14:12 Calculating parity of the bond
18:15 Arbitrage opportunities
22:54 Calculating parity of the stock
26:31 Arbitrage opportunity
29:43 Advantages and disadvantages. Suitability.
30:57 Adjusting conversion ratio for stock dividends

[ashtong.]

Passed my SIE fast with your help, trying for my Series 7 now. Thank you for putting all this out there. It truly helped me more than any study book.

[bennettbullock]

Thank you for this Dean - these videos are tremendously helpful!

[sherillemarquez]

Thank you so much, Dean!! This was golden (again). I test 1st week of Jan and God willing I pass we’re going to Vegas that weekend. Would be awesome to buy you a drink and thank you in person!

[amandahowland]

Hi Dean! Thanks again for another great video. I test on the 13th after failing by 2 points the first time. Your videos have been super helpful! One question I have regarding arbitrage is that you said that bonds should be trading at a premium above parity, and if they aren’t then there is an arbitrage opportunity. However on pass perfect it says “if the common stock is trading in the market a price above parity, then an arbitrage opportunity exists” which to me sounds like the opposite of what you said. I could totally just be reading it wrong because my brain is kinda mush today but can you explain the difference here? Want to make sure I have clarity since this seems to be a question that I will for sure get!

[EthanAlessi-dbho]

I am reading unit 5 "Municipal Securities" i am on the part about how Muni bonds are traded and i am seeing things about settlement date T+2, how does the whole 30 day month 360 day year vs 365 day accrue interest play into the new rule of everything switching over to T+1? does it seem likely that they would take things out like you mentioned in your previous video or count them in the 10 questions that dont count on the exam as a result of the new legislation having just being taken into effect in may? what are your thoughts/opinions

[ignatiushorstmann]

Dean, amazing videos, but if possible could you please move your self video out of the top right hand side? its difficult to see the numbers sometimes which can make it slightly more difficult to work along with.

[EthanAlessi-dbho]

hi dean, is the "arbitrage opportunity" testable? is the point of it Posibility testable or are you just informing for real world

[Caligula.IO_]

Would you consider moving your face from the top right corner (which is likely to block part of the question) to the bottom right corner (where there is rarely, if ever, any text)?

[marinagonzales]

Hi Dean, I failed the 7 last month by 3 questions. Went in pretty confident but was surprised by some of these conversion questions showing the conversion rate as "14:1" or "5:1". Really threw me off during the test as I do not recall Kaplan having practice questions in this form. Can you explain to me what to do with an actual ratio when given in a question? I may be overthinking this.... thank you

[AdamPovis]

This is going to eff me up on my series 7 I think hahaha

[gayletripp]

No shame in the game bc hey, I need clarity on the parity.

So if the stock is at 52 a share and the bond is 1, 250, what was the final answer in the better deal? I got lost in the arbitrage and didn’t know what the investor should do?