Derivative instruments are
A)assets such as bonds or common stock that derive their value from the value of the companies which issue them.
B)assets whose rates of returns must be derived from information published in financial tables.
C)assets which derive their value from underlying assets.
D)computers which display real-time financial information.

Question

Quizplus · Accepted Answer

Derivative instruments are assets whose value is derived from underlying assets, such as options, futures, and swaps. They are often used for hedging or speculative purposes and their value is based on the performance of the underlying asset. Choices A and B are incorrect because they do not accurately describe derivative instruments, and choice D is incorrect because it refers to a type of technology rather than a financial asset.

Derivative Instruments Are