Which Organisation Is More Likely to Be Highly Operationally Geared

question 58

Multiple Choice

Which organisation is more likely to be highly operationally geared?

• A) internet service provider
• B) takeaway food outlet
• C) hairdresser
• D) vehicle manufacturer

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Definitions:

Warrants

Financial instruments allowing the holder to choose to purchase or sell an asset at a predetermined price prior to a specified deadline, without being required to do so.

Call Options

Financial derivatives that give the holder the right, but not the obligation, to buy an asset at a specified price within a specific time frame.

Convertible Bonds

Bonds that can be converted into a predetermined number of the issuing company's shares at certain times during their life, usually at the discretion of the bondholder.

Warrants

Securities that grant the holder the right to purchase a company's stock at a specified price before a certain date, often attached to bonds.