Convertible securities—like convertible bonds and preferred stock—allow investors to exchange their holdings for common stock. This video walks through how conversion works and how to calculate parity price, a concept often tested in pricing and suitability questions.

You’ll learn:

• How convertible bonds and preferred stock convert to common shares

• The formula for determining conversion ratio and parity price

• How to compare market value of the bond vs. equivalent stock value

• Why investors care about parity and when it impacts decision-making

• Common exam scenarios involving conversions and pricing

📘 Related Exams: Series 7, Series 65, Series 66
🧠 Skill Level: Intermediate
📈 Topics Covered: Convertible bonds, conversion ratio, parity price, security valuation, investment suitability