Exotic Derivatives Are Complicated Blends of Other Derivatives

question 16

Multiple Choice

Exotic derivatives are complicated blends of other derivatives.Some exotics are:

• A)Inverse floaters.
• B)Cap and floors.
• C)Futures.
• D)Both A and B.
• E)Both B and C.

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Definitions:

Face Validity

A measure of how suitable, relevant, or meaningful a test or procedure appears on the surface, even if not necessarily proven through empirical means.

Classification

The process of organizing or categorizing objects or concepts based on shared qualities or characteristics, often used in sciences to group information systematically.

Standardization

The process of implementing and developing technical standards to ensure consistency and compatibility within certain processes or products.

Cognitive-Behavioral

Relating to a form of psychotherapy that treats problems and boosts happiness by modifying dysfunctional emotions, behaviors, and thoughts.