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Basic Question 5 of 6
Which of the following securities is NOT a fixed-income obligation?
B. Collateral trust bonds
C. Warrants
D. Preferred stock
A. Convertible bonds
B. Collateral trust bonds
C. Warrants
D. Preferred stock
User Contributed Comments 2
| User | Comment |
|---|---|
| ankurwa10 | actually, warrants can be considered equity. there has been some legal debate on the actual classification of warrants, i.e. whether debt or equity, but given that it allows the conversion into equity, when exercised, should be equity for the sake of this question. |
| CJPerugini | ^ It doesn't matter how you classify the warrant because it does not offer fixed income. |
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Learning Outcome Statements
define a derivative and describe basic features of a derivative instrument
CFA® 2025 Level I Curriculum, Volume 5, Module 1.