As the Price of the Underlying Stock Rises Above the Exercise

question 55

Multiple Choice

As the price of the underlying stock rises above the exercise price of a warrant, the investor's ability to earn larger potential return diminishes. Therefore, the warrant premium will

• A) remain unchanged.
• B) decrease.
• C) increase.
• D) double.

---

Definitions:

Capital/Money

Financial assets or their financial value used to fund operations and investments in a business.

Entrepreneurship Stage

Describes a phase in the lifecycle of a new business venture, ranging from the idea conception to establishing the business and its eventual growth or closure.

Small Business Management

The ongoing process of owning and operating an established business.

Triggering Event

A specific occurrence that causes a process to start, or significantly impacts the course of an ongoing situation.