Which of the Following Statements Concerning Long-Term Equity AnticiPation Securities

question 56

Multiple Choice

Which of the following statements concerning Long-term Equity AnticiPation Securities (LEAPS) is correct?

• A) LEAPS are traded solely in the over-the-counter market.
• B) LEAPS are options that are available only on individual common stocks.
• C) LEAPS typically have a higher quoted price than that of a regular option.
• D) LEAPS generally have a longer life than a warrant.

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Definitions:

Stock

Shares in the ownership of a company, representing a claim on part of the corporation's assets and earnings.

Share

A unit of ownership in a company or financial asset that gives the holder a claim on part of the company's assets and earnings.

Transfer Agent

An entity appointed by a corporation to maintain records of investors, account balances, and transactions; to issue and cancel shares; and to handle share transfers.

Financial Institution

An establishment that conducts financial transactions such as investments, loans, and deposits.