Which of the Following Characteristics Apply to Warrants

question 16

Multiple Choice

Which of the following characteristics apply to warrants?
I.Warrants are similar to call LEAPS.
II.Warrants pay quarterly dividends.
III.Warrants can generate capital gains.
IV.Warrants normally cover two or less shares of the underlying security.

• A) I, II and III only
• B) II and IV only
• C) I, III and IV only
• D) III and IV only

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Definitions:

Spot Rate

The current market price at which a particular asset can be bought or sold for immediate delivery.

Forward Rate

The agreed-upon price for a financial transaction, such as the exchange of currency, to take place at a future date, used to hedge against market volatility.

Eurobonds

International bonds issued in a currency not native to the country where it is issued.

Withholding Tax

Withholding tax is an income tax that an employer deducts and withholds from an employee's salary and pays directly to the government.