Both statements about Convertible Bonds are correct. Firstly, Convertible Bonds typically offer a lower interest rate than traditional bonds due to the added value of the conversion option, which allows investors to exchange their bonds for equity if the company's stock performs well. Secondly, the conversion feature provides bondholders with a degree of protection against inflation, as they can benefit from potential capital gains tied to the company's stock price, thereby linking their returns to rising consumer prices. This mechanism aligns with financial principles taught in standard UPSC-level material, emphasizing the trade-offs between risk, return, and protective features in financial instruments.