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Reverse Convertible Note
(redirected from Reverse Convertible Notes)

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Reverse Convertible Note
A security that combines aspects of a stock and a bond. An RCN operates like a debt security that pays a fixed coupon, which is usually higher than the coupons for regular bonds. At maturity, the holder may choose to receive a certain amount of stock or cash equal to the value of that stock. RCNs allow the investor to diversify his/her portfolio while only incurring the expense of a single investment vehicle.


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Reverse convertible securities (also called reverse convertible bonds, reverse convertible notes, or revertibles) typically consist of a short-term promissory note issued by an investment bank such as Barclays or Societe Generale combined with a put option on an unrelated equity.
REVERSE CONVERTIBLE NOTES THE DRAW With yields low, it's hard to find attractive returns in fixed-income.
Enforcement brought a case against Ferris, Baker Watts LLC, now part of RBC Wealth Management, fining the firm $500,000 and ordering $190,000 restitution for inadequate supervision of sales of reverse convertible notes to retail customers as well as unsuitable sales of reverse convertibles to 57 accounts held by elderly customers who were at least 85 years old or customers with a modest net worth.
 
 
 
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