All of the Following Are Characteristics of a Derivative Financial

question 132

Multiple Choice

All of the following are characteristics of a derivative financial instrument except the instrument

• A) has one or more underlyings and an identified payment provision.
• B) requires a large investment at the inception of the contract.
• C) requires or permits net settlement.
• D) All of these are characteristics.

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Definitions:

Internal Revenue Code

The codification of the federal tax laws and regulations in the United States, governing tax obligations.

Statement of Cash Flows

A financial report that shows the changes in an entity's cash balance over a specific period, detailing sources and uses of cash.

Operating Activities

The portion of a company's business that relates to its core operations, involving the production, distribution, and sale of goods and services, impacting cash flow and profit.

Investing Activities

Financial actions related to acquiring or disposing of long-term assets and other investments not included in cash equivalents.