Which of the following statements concerning Long-term Equity AnticiPation Securities (LEAPS) is correct?
A) LEAPS are traded solely in the over-the-counter market.
B) LEAPS are options that are available only on individual common stocks.
C) LEAPS typically have a higher quoted price than that of a regular option.
D) LEAPS generally have a longer life than a warrant.

Question

Quizplus · Accepted Answer

LEAPS (Long-term Equity AnticiPation Securities) are options with longer durations than standard options, often up to three years. This extended time frame can lead to a higher quoted price compared to regular options, which typically have shorter durations (up to one year). The longer duration increases the chance of the option becoming profitable, hence the higher price.

Which of the Following Statements Concerning Long-Term Equity AnticiPation Securities