Which of the following statements is not true regarding warrants?
A) Often granted along with another security
B) Carry long maturities, which makes them valuable
C) Not as valuable when the underlying asset is more volatile
D) Issued by companies to raise capital and when they are exercised, more shares are created
E) Provides the investor with the option to convert or exchange the warrant into another security

Question

Quizplus · Accepted Answer

Warrants become more valuable when the underlying asset is more volatile because it increases the chance that the warrant will be in the money before it expires, thus providing a higher potential return to the investor.

Which of the Following Statements Is Not True Regarding Warrants