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:

COV

A statistical measure expressed as a coefficient indicating the relative dispersion of a dataset or the ratio of the standard deviation to the mean.

Coefficient Of Correlation

A statistical measure that quantifies the degree to which two variables' movements are associated, ranging from -1 to 1.

COV

Coefficient of Variation, a standardized measure of the dispersion of a probability distribution or frequency distribution.

Bivariate Distribution

A probability distribution describing two random variables and how their probabilities are distributed over different ranges of values.