Which is the best definition of a warrant?
A)The right to buy an asset at a fixed price during a particular time period.
B)The right to sell an asset at a fixed price during a particular time period.
C)A security that gives the holder the right to purchase shares of a stock at a fixed price over a period of time.
D)The act of buying or selling the underlying asset via the option contract.

Question

Quizplus · Accepted Answer

A warrant is a type of security that gives the holder the right to purchase shares of a stock at a fixed price over a period of time. This fixed price is called the exercise price and the period of time during which the warrant can be exercised is called the exercise period. The holder of a warrant is not obligated to exercise it, but if they choose to do so, they can purchase the shares of the underlying stock at the exercise price.

Which Is the Best Definition of a Warrant