For Some Investors, Derivatives Can Be Attractive Financial Assets to Purchase

question 28

Multiple Choice

For some investors, derivatives can be attractive financial assets to purchase because

• A)these assets can be used to offset the possibility of another risk faced by the investor.
• B)these assets allow an investor to eliminate the risk that they face entirely.
• C)they provide high returns with a very small investment.
• D)they are easier to sell than common stock.

---

Definitions:

Compounded Monthly

Interest calculation method where both the initial principal and the accumulated interest are recalculated every month.

Economic Values

The monetary worth of goods, services, or resources based on their utility and their capacity to satisfy wants or needs.

Wage Increase

An upward adjustment in the pay that employees receive for their work.

Deferred Annuity

An insurance contract designed to generate regular payments starting at a future date, often used as a retirement investment.