A financial asset that represents a claim on another financial asset is classified as a ________ asset.
A) secondary
B) optioned
C) contracted
D) derivative
E) primary

Question

Quizplus · Accepted Answer

A derivative is a financial asset that derives its value from an underlying asset, such as a stock or commodity. It represents a claim on that asset and its value is dependent on the price movements of the underlying asset. Other options, such as secondary or primary, do not accurately describe a financial asset that represents a claim on another financial asset.

A Financial Asset That Represents a Claim on Another Financial