Which of the Following Is NOT One of the Effects

question 4

Multiple Choice

Which of the following is NOT one of the effects of derivatives?

• A) Providing a means of dealing with market volatility.
• B) Reducing the risk of financial transactions.
• C) Increasing the integration of national and global financial markets.
• D) Assisting the Reserve Bank to implement monetary policy.

---

Definitions:

Rate of Return

The percentage of profit or loss on an investment over a specific period, expressing the gain or loss relative to the investment's initial cost.

Small-firm Stocks

Equity securities of companies with a smaller market capitalization, often characterized by higher volatility and potential for growth compared to larger companies.

Efficient Market

A market theory suggesting that asset prices fully reflect all available information, making it impossible to consistently achieve higher returns.

Holding Period

The duration for which an investment is held by an investor before being sold.