Which of the Following Statements Concerning Long-Term Equity AnticiPation Securities

question 56

Multiple Choice

Which of the following statements concerning Long-term Equity AnticiPation Securities (LEAPS) is correct?

• A) LEAPS are traded solely in the over-the-counter market.
• B) LEAPS are options that are available only on individual common stocks.
• C) LEAPS typically have a higher quoted price than that of a regular option.
• D) LEAPS generally have a longer life than a warrant.

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Definitions:

Treasury Stock

Shares once issued to the public but then re-obtained by the originating company, lessening the quantity of stock present in the marketplace.

Common Stock

Equity security that represents ownership in a corporation, giving holders the right to vote and share in the company's profits.

Retained Earnings

Profits that are not distributed as dividends but are instead reinvested into the business.

Net Income

Net Income is the total earnings of a company after subtracting all expenses, taxes, and costs from its total revenue.