Which of the following is an example of a "warrant"?
A)Right to buy 100 shares of CIBC at $50.00 per share over the next 5 years.
B)Commitment to buy 100 barrels of oil next month at $125/barrel.
C)Commitment to buy $100,000 U.S. dollars in 4 months at US$ = 1.10.
D)Pay interest at prime +3% in exchange for receiving interest at 5%.

Question

Quizplus · Accepted Answer

A warrant is a financial instrument that gives the holder the right, but not the obligation, to buy a company's stock at a specific price before the warrant expires. Choice A describes this scenario, where the holder can buy shares of CIBC at a set price over a period, which is exactly what a warrant entails.

Which of the Following Is an Example of a "Warrant