One of the Main Reasons for the Name "Derivatives" Is

question 52

Multiple Choice

One of the main reasons for the name "derivatives" is that

• A) the value of the underlying instrument derives its value from the derivative instrument.
• B) the instruments derive their value from the value of other instruments.
• C) calculus is required to convert their market price to a dollar price.
• D) none of the above.

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Definitions:

Permanent Accounts

Balance sheet accounts whose balances are carried forward to the next accounting period, including assets, liabilities, and equity accounts.

Temporary Accounts

Accounts that track financial results for a specific period before being reset by transferring the balance to permanent accounts, including revenue, expense, and dividend accounts.

Trial Balance

A bookkeeping worksheet where the balances of all ledgers are compiled into debit and credit columns to ensure accuracy in the accounts.

Additional Accounts

Accounts that are created to track or manage specific financial transactions not covered by the standard set of accounts.