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Basic Question 1 of 16

Which of the following instruments gives the owner the right to purchase securities directly from the firm at a fixed price for a specified time?

I. Warrant
II. Call option
III. Put option

User Contributed Comments 10

User Comment
LondonBoy Why not I & II ?
niti Question says directly from firm.Hence ans is I only.
danlan That's the difference between Warrant and Call option: directly from firm/not.
mtcfa Got it.
Rotigga Caught me off guard. Good question.
cslau83 Call could be direct from company when company writes call.
gulfa99 "for a specified time"
Creep Indeed, it's the "specified time" clause that is the kicker....
jonan203 "specified time" has nothing to do with it, call and put options have a limited life over a "specified time" as well; however, they are traded on exchanges, not by the company!
gill15 Damn...nice catch--- some of these just get you...
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I used your notes and passed ... highly recommended!


Learning Outcome Statements

describe fixed-income securities with embedded options;

CFA® 2024 Level II Curriculum, Volume 4, Module 30.