Accounting / July 19, 2018 / Khloe Santiago
If the stock does poorly, however, the investor won’t be able to convert the security to stock and will only have the yield to show for his or her investment. But unlike stock, convertible bonds can only fall so far – provide the issuing company remains solvent – since they have a specific maturity date at which time investors will receive their principal. In this sense, convertible bonds have more limited downside than common stocks.
A positive net interest margin indicates that an entity has invested its funds efficiently while a negative return implies that the bank or investment firm has not invested efficiently. In a negative net interest margin scenario, the company would have been better served by applying the investment funds toward outstanding debt or utilizing the funds for more profitable revenue streams.
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