Warrant
Security giving right (not obligation) to buy company shares at set price within period.
Real World
Amazon has issued warrants to partners such as Rivian, giving Amazon the right to purchase shares at a fixed price — if Rivian's value rises, Amazon profits significantly without having committed to buying shares upfront.
Exam Focus
Clarify that warrants give the right but not the obligation to buy; confusing this with ordinary shares is a common exam error.
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