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SIE: Equity Securities
SIE practice questioneasyWarrants

A warrant is best described as:

  1. AA certificate for a cash dividend.
  2. BA bond that pays interest annually.
  3. CA long-term option to buy stock at a set price.✓ Correct answer
  4. DA short-term loan to the company.
Explanation

Why CA long-term option to buy stock at a set price.

Warrants grant the right to purchase stock at a fixed price for an extended period. Bonds, dividends, and loans are unrelated to warrants.

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