An Instrument That Derives Its Value from Another Underlying Asset

question 43

Multiple Choice

An instrument that derives its value from another underlying asset is known as a(n) :

• A) hedge.
• B) derivative.
• C) basis.
• D) backdate agreement.
• E) original document.

---

Definitions:

Corporation

A legal entity that is separate and distinct from its owners, capable of conducting business, owning assets, and being liable for debts.

Paralegals

Individuals trained in subsidiary legal matters but not fully qualified as lawyers, who perform tasks requiring knowledge of the law and legal procedures under the supervision of a lawyer.

Banned

Prohibited by law or regulation from use, distribution, or production.

Business Entities

Structures established by one or more individuals to conduct business or engage in activities for profit, including corporations, partnerships, and sole proprietorships.