What is the meaning of "out-of-the-money warrants"?
A)Warrants are out-of-the-money if the market price of the share exceeds the exercise price.
B)Warrants are out-of-the-money if the market price of the share is less than the exercise price.
C)Warrants are out-of-the-money if the market price of the share equals the exercise price.
D)Warrants are out-of-the-money when the market price means that it will be exercised.

Question

Quizplus · Accepted Answer

Out-of-the-money warrants refer to warrants where the market price of the underlying asset is lower than the exercise price. This means that the warrant holder would not make a profit by exercising the warrant, as they would be buying an asset for a higher price than its current market value.

What Is the Meaning of "Out-Of-The-Money Warrants