Question: This excerpt is taken from an article titled "Camwood Looks for Convertibles," which appeared in the January 13, 1992, issue of bond Week , p. 7:
Camwood Christian Capital Management will invest new money in its $400 million high-yield portfolio in "busted convertibles," double- and triple-B rated convertible bonds of companies, said James Camwood, CEO. Camwood likes these convertibles as they trade at discounts and are unlikely to be called, he said.
a. What is a busted convertible?
b. What is the premium over straight value at which these bonds would trade?
c. Why does Mr. Camwood seek convertibles with higher investment-grade ratings?
d. Why is Mr. Camwood interested in call protection?