A Derivative Security Is A

question 16

Multiple Choice

A derivative security is a:

• A) Financial asset that derives its value based solely on values in the futures market.
• B) Real asset whose value is based on the market value of a financial asset.
• C) Financial asset that represents a claim to another financial asset.
• D) Financial asset with a life equal to the life of the underlying asset.
• E) Real asset that obligates both the buyer and the seller to complete an exchange on a predetermined date at a predetermined price.

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Definitions:

Market Share

The percentage of an industry's total sales that is earned by a particular company over a specific time period.

Market Concentration

The degree to which a small number of firms control a large percentage of a relevant market.

Competition

The rivalry among businesses or individuals for dominance or a greater share of the market or attention, often leading to innovation and better choices for consumers.

Monopolist

An individual or entity that holds a dominant position or exclusive control over a market or supply of a particular commodity or service.