Which of the Following Is NOT Correct with Respect to Derivative

question 60

Multiple Choice

Which of the following is NOT correct with respect to derivative securities?

• A)They are among the riskiest of securities in the financial securities markets.
• B)They can be used for hedging purposes.
• C)Examples of derivatives include futures, options and swaps.
• D)All of these are correct statements about derivatives.

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Definitions:

Federal Income Tax

A charge imposed by the national government on the yearly income of individuals, corporations, trusts, and various legal bodies.

Gross Earnings

The total amount of revenue or income earned by an individual or business before any deductions or taxes are applied.

Net Pay

The amount of money an employee takes home after deductions like taxes and retirement contributions have been subtracted.

FICA Tax

A mandatory tax used to fund the United States Social Security and Medicare programs, deducted from the wages of employees.