Which of the Following Statements Is True

question 54

Multiple Choice

Which of the following statements is true?

• A)​The ability to settle the derivative by actually buying or selling the related asset is referred to as net settlement.
• B)​The quantity or number of units specified by a derivative is known as the underlying.
• C)​A derivative instrument derives its value from a related asset or liability.
• D)​Usually, a derivative instrument requires little or no initial investment.

---

Definitions:

End States

The final outcomes or conditions that are achieved after the completion of processes or actions.

Fixed Budget

A predetermined limitation on spending, beyond which expenses cannot exceed for a specific period.

Single Estimate

An approach in project management or forecasting where a single value is used as the most likely outcome without accounting for uncertainty.

Comprehensive

Refers to an all-inclusive, thorough consideration or coverage of a specific topic or area.