Which of the Following Is the Best Definition of Derivative

question 38

Multiple Choice

Which of the following is the best definition of derivative security?

• A) Risk that futures prices will not move directly with cash price hedged.
• B) An option that gives the owner the right, but not the obligation, to buy an asset.
• C) A contract that pays off when a credit event occurs, default by a particular company termed the reference entity, giving the buyer the right to sell corporate bonds issued by
• The reference entity at their face value.
• D) Hedging an asset with contracts written on a closely related, but not identical, asset.
• E) A financial asset that represents a claim to another financial asset.

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Definitions:

Mindfulness-based Stress Reduction

A therapeutic program that combines mindfulness meditation and yoga to reduce stress and improve psychological wellbeing.

Constructive Ways

Methods or approaches that are positive, helpful, and aimed at building or improving something.

Internal Sources

Origins of information, motivation, or inspiration that come from within an individual, such as personal beliefs, thoughts, and emotions.

Beliefs

Mental acceptance of and conviction in the truth, existence, or reliability of something without empirical evidence.