A Critical Characteristic of a Derivative Is That the Instrument

question 53

Multiple Choice

A critical characteristic of a derivative is that the instrument

• A)​derives its value from a related asset or liability.
• B)​derives its value from changes in value of a related asset or liability.
• C)​requires that the related asset or liability be sold or bought at settlement.
• D)​requires the holder of the derivative instrument to make a significant investment.

---

Definitions:

Add

The mathematical operation of combining two or more quantities to achieve a sum or total.

DS

An acronym commonly used for Decision Support systems, which assist in making decisions, often through the analysis of data.

Add

To combine one number or quantity with another to obtain a total.

Conj

Short for conjunction, a part of speech that connects words, sentences, phrases, or clauses.