Derivatives Are Financial Instruments That Derive Their Value from Changes

question 28

Multiple Choice

Derivatives are financial instruments that derive their value from changes in any of the following underlyings except:

• A) Stock prices
• B) Percentage discount on accounts receivable
• C) Interest rates
• D) Commodity prices

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Definitions:

Earnings

Earnings typically refer to a company's profit, specifically the amount of money it makes from its operations over a certain period.

Cash Dividend

A payment made by a corporation to its shareholders, usually in the form of cash, based on the number of shares they own.

Report Income

The act of documenting and declaring earned income within a specific period for tax and accounting purposes.

Cash Surrender Value

The amount of cash that an insurance policyholder can receive upon cancelling the policy before its maturity or an insured event occurs.