Which of the Following Instruments Gives the Owner the Right

question 23

Multiple Choice

Which of the following instruments gives the owner the right to purchase securities directly from the firm at a fixed price during a specified period of time?

• A) Warrant
• B) Call option
• C) American option
• D) European option

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Definitions:

Fair Value

The price one would receive for offloading an asset or would pay to reassign a liability during a formal transaction with participants in the market at the time of valuation.

Consolidated Balance

Refers to the presentation of assets, liabilities, and equity in a single balance sheet that combines the financials of a parent company with its subsidiaries.

Parent

In corporate finance, refers to a company that holds a controlling interest in one or more subsidiary companies.