A ________ gives the holder an option to purchase a certain number of shares of common stock at a specified price over a certain period of time.
A) put option
B) convertible bond
C) stock purchase warrant
D) repurchase agreement

Question

Quizplus · Accepted Answer

A stock purchase warrant is a security that gives the holder the right to buy a certain number of shares of common stock at a specified price, known as the exercise price, over a certain period of time. It is usually issued in connection with a new offering of common stock or other securities and is often used as a sweetener to attract investors. A put option gives the holder the right to sell a certain number of shares of common stock at a specified price over a certain period of time, while a convertible bond is a bond that can be converted into a certain number of shares of common stock. A repurchase agreement is a short-term loan in which an investor agrees to buy securities from a dealer and then sell them back later at a slightly higher price.

A ________ Gives the Holder an Option to Purchase a Certain