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Convertible Bond

What is a Convertible Bond?

It’s a weird but profitable mix between a normal loan and a stock. The company borrows money from you and pays regular interest. But here’s the twist: you get the option to convert that debt into actual shares of the company at a fixed price later on. If the company’s stock price skyrockets, you swap the bond for cheap shares and make a killing. If the stock tanks, you hold the bond and get your principal back at maturity. It gives you the safety of a bond with the upside of a stock.

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