The exercise price of a _________ is the price at which the holder can purchase common shares of an issuing company.
A) put option
B) call option
C) warrant
D) convertible security
E) straddle

Question

Quizplus · Accepted Answer

The exercise price is specifically associated with a warrant, which gives the holder the right to purchase common shares at a predetermined price (the exercise price). A put option gives the holder the right to sell shares at a certain price, while a call option gives the holder the right to buy shares at a certain price. Convertible securities can be converted into common shares, but do not have an exercise price. A straddle involves buying both a put and a call option at the same strike price.

The Exercise Price of a _________ Is the Price at Which