Which of the Following Is a Financial Derivative That Derives

question 12

Multiple Choice

Which of the following is a financial derivative that derives value from specific insurable losses or from an index of values?

• A)commodity futures contract
• B)corporate bond
• C)catastrophe bond
• D)insurance option

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Definitions:

Inelastic

Describes a situation where the demand or supply of a good is not significantly affected by changes in price.

Supply

The total amount of a good or service that is available to consumers.

Farm Prices

The amount of money that farmers receive for their products, which can fluctuate based on supply, demand, and external factors.

Agricultural Risk Coverage

Agricultural Risk Coverage is a U.S. government program designed to protect agricultural producers from revenue losses due to market fluctuations.