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

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Definitions:

Operating Costs

are expenses associated with the day-to-day functioning of a business, such as rent, utilities, and payroll.

Price of Eggs

The monetary cost required to purchase eggs, which can vary based on factors such as location, type of eggs, and market conditions.

Price Gouging

A situation where sellers increase the prices of goods, services, or commodities to a level much higher than is considered reasonable or fair, often during a crisis.

Increase in Supply

A scenario where there is a growth in the availability of a product or service, often due to improvements in technology or increases in input resources.