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.

---

Definitions:

Expert Systems

Computer systems that mimic the decision-making ability of a human expert.

Human Decision Makers

Individuals who make decisions based on analysis, intuition, experience, and judgment rather than through automated processes.

Predictive Agent

An AI or machine learning-based tool that analyzes patterns and data to forecast future events or behaviors, aiding in more informed decision-making.

Information Agent

A type of intelligent agent that searches for information and displays it to users.