When a Company Sells the Right to Buy a Certain

question 1

Multiple Choice

When a company sells the right to buy a certain number of shares in the company at a pre- determined price at or up to some fixed time in the future,that right is known as a:

• A)bonus issue
• B)redeemable preference share
• C)call option
• D)private issue

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Definitions:

Goods

Items or merchandise that are manufactured or produced for sale.

Chattel Mortgage

A loan agreement where personal movable property is used as collateral for the loan, and the borrower retains possession of the property while repaying the loan.

Pledge

A commitment or security interest, especially in the context of a pledge of assets as collateral for a loan.

Deed of Trust

A legal document used in some states that involves a trustor, a trustee, and a lender (beneficiary), outlining the terms of a real estate transaction and placing the property as security for a loan.