The value of a derivative security is based on the value of an underlying security.

Name: The value of a derivative security is based on the value of an underlying security.
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A derivative security is a financial contract whose value is derived from the value of an underlying asset, such as a stock, bond, commodity or currency. Therefore, the value of a derivative security is influenced by the performance and movements of the underlying security.

The Value of a Derivative Security Is Based on the Value