Warrants are similar to call options on stocks.What's the equivalent of the strike price?
A) The initial price of the warrant
B) The market price of the warrant
C) The price of exercise of the warrant
D) None of the above

Question

Quizplus · Accepted Answer

The equivalent of the strike price in warrants is the price of exercise of the warrant, which is the price at which the warrant holder has the right to purchase or sell the underlying security. Option A is incorrect because the initial price of the warrant is simply the market price at the time of issuance. Option B is incorrect because the market price of the warrant can fluctuate based on supply and demand and is not necessarily related to the price of exercise. Option D is incorrect because there is an equivalent to the strike price in warrants.

Warrants Are Similar to Call Options on Stocks