A Security Whose Value Is Based Solely on the Value

question 324

Multiple Choice

A security whose value is based solely on the value of other assets is called a ________ security.

• A)capital option
• B)hedging
• C)derivative
• D)alternative asset
• E)none of the above

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Definitions:

Variance

A measure of the dispersion or spread of a set of data points around their mean value.

Minimin Strategy

A decision rule used in scenarios involving uncertainty, where the decision maker aims to minimize the potential for the worst-case scenario.

Maximum Payoff

The highest possible return that can be achieved from an investment or decision scenario.

Minimum Payoff

The least amount of return or profit one can expect from an investment or decision.