Two Major Differences Between a Warrant and a Call Option

question 18

Multiple Choice

Two major differences between a warrant and a call option are:

• A)Warrants are contracts outside of the firm while options are within the firm.
• B)Warrants have long maturities while options are usually short maturities.
• C)Warrant exercise dilutes the value of equity while option exercise does not.
• D)Both A and C.
• E)Both B and C.

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Definitions:

Psychics

Individuals who claim to have abilities to perceive information hidden from the normal senses through extrasensory perception.

Empirical Evidence

Information acquired by observation or experimentation.

Predictability

The extent to which future events or behaviors can be forecasted based on current or past information.

Psychology

The scientific study of the human mind and its functions, especially those affecting behavior in a given context.