Which of the Following Are Examples of Derivative Financial Instruments

question 61

True/False

Which of the following are examples of derivative financial instruments?
A. Deferred tax and future income tax benefits.
B. Mortgage loans.
C. Participating, redeemable preference shares.
D. Share options.
E. None of the given answers.
FALSE

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Definitions:

Interest Rate

The cost of borrowing money or the return earned on an investment, usually expressed as a percentage of the principal.

Equity Financing

The method of raising capital through the sale of shares in a company, which gives shareholders ownership rights.

Shareholders

Individuals or entities that own shares in a corporation, giving them a part of the ownership of the company and potentially a claim on part of its assets and earnings.

Municipal Bond

A debt security issued by municipalities to finance their capital expenditures, typically tax-exempt for investors.