Which of the Following Is NOT Correct with Respect to Derivative

question 30

Multiple Choice

Which of the following is NOT correct with respect to derivative securities?

• A) They are among the riskiest of securities in the financial securities markets.
• B) They can be used for hedging purposes.
• C) Examples of derivatives include futures, options, and swaps.
• D) All of these choices are correct.

---

Definitions:

Restriction/Appropriation

The limitation of retained earnings distribution specified by management or shareholders, often for specific purposes like future investments or debt repayment.

Stockholders' Equity

Refers to the residual interest in the assets of a corporation that remains after deducting its liabilities, representing ownership interest in the company.

Par Common Stock

Common stock issued with a nominal value per share, which represents the minimum legal capital that must be paid per share.

Stockholders' Equity

The residual interest in the assets of a corporation after deducting its liabilities, representing the ownership interest of shareholders.