Which of the Following Is Not True About Derivatives

question 52

Multiple Choice

Which of the following is not true about derivatives?

• A) Large losses on derivative investments have been reported in the press.
• B) Derivatives are so named because their value is derived from some underlying measure.
• C) Derivatives are useful instruments for managing risk.
• D) Accounting for derivatives is fully resolved and no additional rules or interpretations are likely.

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Definitions:

Unreasonable Search

A search conducted by authorities without a valid warrant or without probable cause, violating constitutional rights.

Independent Branches

The separation of government into distinct sections, typically including the executive, legislative, and judicial branches, each with its own powers and responsibilities.

Federal Government

The national government of a federation, responsible for governing the entire country and managing issues of national interest.

Constitution

The fundamental principles or established precedents that govern a state, organization, or other entity.