Which of the Following Statements Is Most CORRECT

question 21

Multiple Choice

Which of the following statements is most CORRECT?

• A) One important difference between warrants and convertibles is that convertibles bring in additional funds when they are converted, but exercising warrants does not bring in any additional funds.
• B) The coupon rate on convertible debt is normally set below the coupon rate that would be set on otherwise similar straight debt even though investing in convertibles is more risky than investing in straight debt.
• C) The value of a warrant to buy a safe, stable stock should exceed the value of a warrant to buy a risky, volatile stock, other things held constant.
• D) Warrants can sometimes be detached and traded separately from the debt with which they were issued, but this is unusual.
• E) Warrants have an option feature but convertibles do not.

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Definitions:

CISG

The United Nations Convention on Contracts for the International Sale of Goods, which governs international purchase and sale agreements.

UNCITRAL Model Law on Electronic Signatures

An international framework designed to facilitate the use of electronic signatures and ensure their legal recognition and equivalence to traditional handwritten signatures.

Judicial Branch

The branch of government responsible for interpreting the laws, adjudicating legal disputes, and administering justice.

World Court

The International Court of Justice (ICJ), the principal judicial organ of the United Nations, responsible for settling legal disputes between states and giving advisory opinions on international legal issues.