Which of the Following Security's Value Is Contingent on the Performance

question 5

Multiple Choice

Which of the following security's value is contingent on the performance of an underlying security?

• A) Treasury Bill
• B) Option
• C) Corporate Bond
• D) Equity

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Definitions:

Yield To Maturity

The total return anticipated on a bond if the bond is held until it matures.

Duration

A measure of the sensitivity of the price of a bond or other fixed-income investment to changes in interest rates, typically expressed in years.

Basis Points

Basis Points are a unit of measure used in finance to describe the percentage change in the value or rate of a financial instrument, with one basis point being 1/100th of 1%.

Yield To Maturity

The total return anticipated on a bond if it is held until it matures, including all interest payments and repayment of principal.