The Definition of a Derivative Requires Which of the Following

question 6

Multiple Choice

The definition of a derivative requires which of the following characteristics to be met?
I its value must change in response to a change in an underlying variable such as a specified interest rate, price or foreign exchange rate.
II it must be settled on a net basis
III it must require no initial net investment or an additional net investment that is smaller than would be required for other types of contracts with similar responses to changes in market factors.
IV it is to be settled at a future date

• A) I, II and III
• B) I, III and IV
• C) I, II and IV
• D) II, III and IV

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Definitions:

Learning Curves

Graphs that represent the rate at which people learn and become more efficient at a task over time.

Scheduling Application

Software tools designed to organize, assign, and manage tasks and events on a calendar or timeline.

Learning Curve

The concept that people improve efficiency and decrease errors with experience over time.

Assembly Time

The total time required to assemble a product from its various components.