Warrants Differ from Options in a Number of Ways

question 43

Multiple Choice

Warrants differ from options in a number of ways.Which of the following statements about warrants and options is false?

• A) When originally issued, the life of a warrant is usually much longer than that of a call option.
• B) Warrants are usually issued by the company on whose stock the warrant is written.
• C) Warrants are often used by companies as sweeteners to make new issues of debt or equity more attractive.
• D) Warrant holders have voting rights while option holders do not.
• E) None of the above (that is, all statements are true)

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Definitions:

Extinction

In behavioral psychology, the gradual weakening and eventual disappearance of a conditioned response when the reinforcement is no longer offered.

Punishment

A consequence applied to decrease or eliminate an unwanted behavior, typically involving either physical or psychological discomfort.

Shaping

A behavioral conditioning technique that involves reinforcing successive approximations toward a desired behavior.

Continuous Reinforcement

A learning process in which a desired behavior is reinforced every time it occurs, leading to quicker acquisition of the behavior.