Which of the Following Statements About Derivatives Is False

question 65

Multiple Choice

Which of the following statements about derivatives is false?

• A)Derivatives are financial contracts the values of which are derived from the values of other underlying assets.
• B)Examples of derivatives include futures, options, and combinations thereof.
• C)Bank participation in derivative markets is severely limited because of the inherent riskiness of the instruments.
• D)Derivatives can be used to hedge or to speculate.

Recognize the effects of currency valuation on international trade.

Acquire knowledge about the balance of payments and its components.

Understand the concept and applications of the hamburger standard in evaluating currency value.

Identify key events and timelines in the history of global financial systems.

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Definitions:

Bilateral Mistake

A mistake that occurs when both parties to a contract are mistaken about the same material fact.

Interpretation

The process of explaining the meaning of something, often applied within legal, financial, and technical contexts to understand texts, actions, or events.

Contractor's Bid

A proposal offered by a contractor to perform a specific job or project at a defined price and under certain conditions.

Enforceable

A term used to describe a legal document, such as a contract or agreement, that can be upheld or compelled by law.