u/Famous_Novel4510

Did they messed up?

what if the share price declines by 20 percent , the convertible bond does have a floor of straight value , so if that happens wont the gain be more as he's short on shares

Here when surprise change is given then why is answer the intercept??

The answer described is correct but doesn’t RMRF risk shows systematic risk and more the diversification less the systematic risk and less the rmrf risk so why can’t we say answer is Z