Which of the Following Statements Explains the Premium Paid Over

question 11

Multiple Choice

Which of the following statements explains the premium paid over the intrinsic value of a warrant?

• A)The higher the price volatility of the common stock, the greater the premium
• B)The market value may fall below the intrinsic value because of the downside risk
• C)The greater the time period over which the option may be exercised, the higher the premium
• D)More than one of the above are true

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