4. Gearing Flashcards
1
Q
What is the definition of ‘gearing’?
A
The ability to gain exposure to an asset at only a fraction of the cost.
2
Q
What three instruments are examples of highly geared instruments?
A
Futures, Options and Warrants
3
Q
What is a warrant, and what is it similar to?
A
Similar to an option, it gives the holder the right to buy an asset at a set price.
4
Q
What are warrants usually attached to?
A
A bond, as a ‘sweetener’.
5
Q
Can a warrant be separated from a bond, and traded on its own?
A
Yes
