Warrants are similar to traded options except:
A) only warrants have exercise prices.
B) only warrants depend on changes in the underlying stock to determine value.
C) warrants affect the number of shares outstanding.
D) Both only warrants have exercise prices and warrants affect the number of shares outstanding.
E) Both only warrants have exercise prices and only warrants depend on changes in the underlying stock to determine valuE.

Question

Quizplus · Accepted Answer

Warrants, when exercised, result in the issuance of new shares, thus increasing the number of shares outstanding. Traded options do not affect the number of shares outstanding as they are contracts between two parties.

Warrants Are Similar to Traded Options Except