Which one of the following statements is correct?
A) A callable bond allows the owner to force the issuer to repurchase the bond during some fixed time period.
B) Equity in a leveraged firm is effectively a put option on the firm's assets.
C) A warrant is similar to insurance.
D) A loan guaranty is similar to a call option.
E) An overallotment option is effectively a call option granted to the underwriter.
Correct Answer:
Verified
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