Three types of equity securities derivatives are:
A)puts and calls created by corporations,and warrants created by investors.
B)puts and calls created by investors,and warrants created by corporations.
C)options,preferred stock,and commons stock created by corporations.
D)options,stock,and warrants,created by corporations.

Question

Quizplus · Accepted Answer

Equity securities derivatives are financial instruments whose value is derived from underlying equity securities. The three types of equity securities derivatives are put options, call options, and warrants. Put options and call options are created by investors, while warrants are typically created by corporations. Therefore, the answer is B - puts and calls created by investors and warrants created by corporations. Options provide the holder with the right, but not the obligation, to buy or sell a specific number of shares at an agreed-upon price (the strike price) until a specified expiration date. Warrants are similar to options but are issued by corporations, typically as part of a financing offering.

Three Types of Equity Securities Derivatives Are