Which of the Following Are Advantages of Derivatives

question 24

Multiple Choice

Which of the following are advantages of derivatives?

• A)lower transaction costs than securities and commodities
• B)reveal information about expected prices and volatility
• C)help control risk
• D)make spot prices stay closer to their true values
• E)all of the above

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Definitions:

Accident-prone Drivers

Individuals who have a higher likelihood of being involved in vehicular accidents due to behavior or other factors.

Bonding

The process of establishing a secure or insured relationship, often through a financial guarantee or a bond, to protect against losses or damages.

Wrongful Act

An action that is illegal or immoral, which can lead to civil liability or criminal charges for the person who commits it.

Subrogation

The legal process by which one party, such as an insurer, assumes another's legal right to collect a debt or damages after having paid for the loss.