Which One of the Following Statements Concerning Warrants Is Correct

question 41

Multiple Choice

Which one of the following statements concerning warrants is correct?

• A) Warrants are similar to put options.
• B) Warrants generally have very short maturity periods.
• C) Owning a warrant is the same as selling a call option.
• D) When a warrant is exercised, the number of outstanding shares increases.
• E) Shares are transferred from one shareholder to another when a warrant is exercised.

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Rational Decisionmaker

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A mandatory financial charge or other type of levy imposed by a government on individuals or businesses to fund public expenditures and services.

Incentive

A factor, either monetary or non-monetary, that motivates or encourages an individual or group to perform certain actions or behave in a specific way.