The value of a wheat futures contract is based on the expected price of wheat, so it is an example of a(n)
A) stock.
B) derivative.
C) option.
D) none of the above.

Question

Quizplus · Accepted Answer

A wheat futures contract is a derivative because its value is derived from the price of the underlying asset, which in this case is wheat. Derivatives are financial instruments whose value is based on or derived from the performance of an underlying asset, index, or interest rate.

The Value of a Wheat Futures Contract Is Based on the Expected