Which of the following characteristics apply to warrants?
I.Warrants are similar to call LEAPS.
II.Warrants pay quarterly dividends.
III.Warrants can generate capital gains.
IV.Warrants normally cover two or less shares of the underlying security.

Question

Quizplus · Accepted Answer

Warrants are similar to call LEAPS as they give the holder the right to buy shares at a specific price before expiration. They can generate capital gains if the stock price exceeds the exercise price. However, warrants do not pay dividends, and they typically cover more than two shares of the underlying security.

Which of the Following Characteristics Apply to Warrants