A Financial Instrument That's Value Is Based on an Underlying

question 24

Multiple Choice

A financial instrument that's value is based on an underlying security or commodity is called a/an

• A)insurance contract
• B)employment contract
• C)enterprise contract
• D)derivative security

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Definitions:

Apparent Power

The total power in an AC circuit, combining both active (real) and reactive power, measured in volt-amperes (VA).

Voltage Drop

The reduction in voltage across a component or conductor in an electrical circuit, caused by the flow of current through the resistance or impedance of the component or conductor.

Series RL Circuit

An electrical circuit composed of resistors (R) and inductors (L) connected in series, characterized by the resistance and inductive reactance that influence the circuit's total impedance.

Inductive Reactance

The opposition that inductors present to alternating current, due to the magnetic field created around it, measured in Ohms.