Examveda
Examveda

Type of options that permit bond holder to buy stocks at stated price are classified as

A. provision

B. guarantee

C. warrants

D. convertibles

Answer: Option C

Solution(By Examveda Team)

Type of options that permit bond holder to buy stocks at stated price are classified as warrants. Warrants are a derivative that give the right, but not the obligation, to buy or sell a security most commonly an equity at a certain price before expiration. The price at which the underlying security can be bought or sold is referred to as the exercise price or strike price.

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