Which of the following is a basic characteristic of warrants?
A) It improves the marketability of an issue.
B) It is non detachable.
C) It increases the required interest rate.
D) It has an exercise period shorter than one month.

Question

Quizplus · Accepted Answer

Warrants are typically attached to other securities, such as bonds or stocks, and they give the holder the right to buy or sell the underlying security at a specific price and time. By improving the marketability of an issue, warrants can increase demand for the underlying security and potentially increase its price. B is incorrect because warrants are detachable and can be bought and sold separately from the underlying security. C is incorrect because warrants do not typically affect the required interest rate. D is incorrect because warrants can have exercise periods ranging from months to years.

Which of the Following Is a Basic Characteristic of Warrants