An Example of a Derivative Security Is

question 54

Multiple Choice

An example of a derivative security is

• A) a common share of Microsoft.
• B) a call option on Intel stock.
• C) a commodity futures contract.
• D) a call option on Intel stock and a commodity futures contract.
• E) a common share of Microsoft and a call option on Intel stock.

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Definitions:

Merchant

An individual or business entity engaged in the trade of goods, services, or both to consumers, primarily for earning a profit.

Original Owner

Refers to the first owner or possessor of an item or property after it was created or came into being.

Shipment Contract

An agreement in which the seller is obligated to send goods to a buyer, but the risk of loss passes to the buyer when the goods are delivered to the carrier.

Title Passes

The point at which ownership of property is transferred from one party to another according to the terms of a contract.