An asset that derives its value from some other underlying asset is a
A) stock.
B) bond.
C) derivative.
D) CD.

Question

Quizplus · Accepted Answer

A derivative is an asset that derives its value from some underlying asset such as a stock, commodity, currency, or bond. Derivatives are used to manage risk, speculate on price movements, or to lock in a future price. Examples of derivatives include futures, options, swaps, and forwards. Stocks, bonds, and CDs do not derive their value from underlying assets.

An Asset That Derives Its Value from Some Other Underlying