Warrants
A) provide substantially less capital appreciation potential than the underlying stock.
B) tend to be quite costly.
C) have a stipulated price and an expiration date.
D) are not traded in the secondary markets because of their low unit costs.

Question

Quizplus · Accepted Answer

Warrants indeed have a stipulated (exercise) price and an expiration date, which are key characteristics distinguishing them from other financial instruments. They give the holder the right, but not the obligation, to buy the underlying stock at a specified price before the warrant expires.