Which of the following would not describe the difference between warrants and call options?
A) Warrants are issued by firms whereas call options are issued by individuals.
B) Call options have an exercise price whereas warrants do not.
C) Exercising of warrants creates dilution whereas exercising all options does not.
D) When call options are exercised existing shares trade hands whereas if warrants are exercised new stock must be issued.

Question

Quizplus · Accepted Answer

B) is incorrect because both warrants and call options have an exercise price. The exercise price is the price at which the holder can buy the underlying asset.

Which of the Following Would Not Describe the Difference Between