Which of the Following Would Not Describe the Difference Between

question 39

Multiple Choice

Which of the following would not describe the difference between warrants and call options?

• A) Warrants are issued by firms whereas call options are issued by individuals.
• B) Call options have an exercise price whereas warrants do not.
• C) Exercising of warrants creates dilution whereas exercising all options does not.
• D) When call options are exercised existing shares trade hands whereas if warrants are exercised new stock must be issued.

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Definitions:

Federal Funds

Refers to reserves that banks lend to each other overnight to maintain their reserve requirements, often influencing interest rates.

Private Funds

Financial resources raised from non-governmental sources, used for investment or other private enterprise.

Market Economy

An economic system where decisions regarding investment, production, and distribution are based on supply and demand, and prices of goods and services are determined in a free price system.

Surplus Goods

Items in excess of what is needed, often resulting in stockpiles or discounted sales.