A warrant premium depends largely on investor expectations and on the ability of investors to get more leverage from the warrants than from the underlying stock.

Question

Quizplus · Accepted Answer

A warrant premium does depend on investor expectations regarding the performance of the underlying stock, as well as the perceived leverage that can be obtained from the warrants compared to the stock. Therefore, the statement is true.

A Warrant Premium Depends Largely on Investor Expectations and on the Ability