Which of the Following Is Not a Distinguishing Characteristic of a Derivative

question 60

Multiple Choice

Which of the following is not a distinguishing characteristic of a derivative instrument?

• A) Derivative instruments have terms that require or permit net settlement.
• B) Derivative instruments have a low initial net investment.
• C) Derivative instruments are highly effective throughout their term.
• D) Derivative instruments have one or more underlyings and notional amounts.

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Definitions:

Need For Cognition

A psychological trait that describes an individual's tendency to engage in and enjoy effortful cognitive activities and thinking.

Self-Esteem

Someone's self-assessment of their worth.

Promotion Focus

A motivational state where individuals are oriented towards achieving positive outcomes and aspirations.

Prototype/Willingness Model

A behavioral intention model that evaluates an individual's willingness to engage in a behavior based on their prototype or image of a person who performs that behavior.