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Bonds that may be exchanged for common stock at the option of the bondholders are called

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Answer: CONVERTIBLE BONDS

Step-by-step explanation: In simple words, convertible bonds refers to those fixed assets securities that could be converted into common stock on the discretion of the bondholders.

Such kind of securities is usually used by companies who are new to the market and wants to attract investors with maximum security of bonds as initial investment and maximum potential benefit as an option of converting bonds into common stock.

These types of bonds offer lower interest rates due to the embedded option of conversion.

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