Amy is a current shareholder of DJ Industries. She has been given the right to purchase an additional 25 shares of DJ Industries stock at a price of $32 a share if she exercises that right within the next 12 months. What is this security called that Amy has been given?

Question

Quizplus · Accepted Answer

A warrant is a security that gives the holder the right, but not the obligation, to buy additional shares of stock at a specific price within a certain time frame. In this case, Amy has been given the right to purchase 25 shares of DJ Industries stock at $32 per share within the next 12 months.

Amy Is a Current Shareholder of DJ Industries