You Have Paid $5 to Buy a Warrant with an Exercise

question 22

Multiple Choice

You have paid $5 to buy a warrant with an exercise price of $40.The stock is currently trading at $50.How much profit or loss would you make by exercising the warrant if one warrant entitles the owner to buy one share of stock?

• A)$5.00
• B)$10.00
• C)$40.00
• D)$50.00