Concerning Warrants and Call Options, Which of the Following Statements

question 7

Multiple Choice

Concerning warrants and call options, which of the following statements generally is correct?

• A) The issue procedures for both are quite similar.
• B) When a call option is exercised, the firm must issue new stock.
• C) When a warrant is exercised, existing stock changes hands.
• D) Exercise of a call option does not affect share value, but warrant exercise does.

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Definitions:

Free Will

The concept that human beings have the power to make choices and decisions without constraints, implying a degree of autonomy and self-determination.

Deterministic

The philosophical concept that suggests all events, including moral choices, are completely determined by previously existing causes.

Neurotic Anxiety

A type of anxiety stemming from unconscious conflicts that threaten to surface, often manifesting as irrational fears or behaviors.

Id

In psychoanalytic theory, the part of the mind that is the source of instinctive impulses that seek satisfaction in accordance with the pleasure principle.