You Own Share in a Firm That Has a Pure

question 34

Multiple Choice

You own share in a firm that has a pure discount loan due in six months.The loan has a face value of €50,000.The assets of the firm are currently worth €62,000.The shareholders in this firm basically own a _____ option on the assets of the firm with a strike price of:

• A)put; €62,000.
• B)put; €50,000.
• C)warrant; €62,000.
• D)call; €62,000.
• E)call; €50,000.

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