Q596
Type of options that permit bond holder to buy stocks at stated price are classified as
A.
provision
B.
guarantee
C.
warrants
AnswerD.
convertibles
Answer: Option C
Solution
Answer: Option C
Solution:
Type of options that permit bond holder to buy stocks at stated price are classified as warrants. Warrants are a derivative that give the right, but not the obligation, to buy or sell a security most commonly an equity at a certain price before expiration. The price at which the underlying security can be bought or sold is referred to as the exercise price or strike price.