Derivative Securities Are Also Called Contingent Claims Because

question 20

Multiple Choice

Derivative securities are also called contingent claims because

• A) their owners may choose whether or not to exercise them.
• B) a large contingent of investors holds them.
• C) the writers may choose whether or not to exercise them.
• D) their payoffs depend on the prices of other assets.
• E) contingency management is used in adding them to portfolios.

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Definitions:

Living Standards

The degree of wealth, comfort, material goods, and necessities available to a certain socioeconomic class or geographic area.

Newly Industrializing Countries

Countries that are transitioning from primarily agricultural to primarily industrial sector economies, experiencing rapid economic growth and development.

Less Developed Countries

Nations with a lower level of income, industrialization, and modernization compared to more developed countries.

Productivity

A measure of the efficiency of production, often calculated as the ratio of outputs to inputs in a given time period.