Two Major Differences Between a Warrant and a Call Option

question 14

Multiple Choice

Two major differences between a warrant and a call option are:

• A)warrants are contracts outside of the firm while options are within the firm.
• B)warrants have long maturities while options are usually short maturities.
• C)warrant exercise dilutes the value of equity while option exercise does not.
• D)Both A and C.
• E)Both B and C.

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Definitions:

Pictorial View

A drawing or illustration that represents an object in three dimensions, providing a realistic view as seen from a particular angle.

Bird's Eye View

A view from above, typically at a high vantage point, giving a comprehensive overview of an area or layout.

Cavalier Oblique

A method of drawing in which an object is represented with its depth drawn at full scale, but the height and width are proportionally scaled, creating a distorted but useful perspective.

True Length

The actual length of a line or object, as opposed to its apparent length when viewed from an angle or through a projection.