A security that is neither debt nor equity but derives its value from an underlying asset that is often another security is called
A) derivative security.
B) none of the above.
C) hybrid security.
D) convertible security.

Question

Quizplus · Accepted Answer

The term "derivative" refers to a security that derives its value from an underlying asset, such as a stock or bond. Derivatives can take many forms, including options, futures, and swaps. They are not considered debt or equity because they do not represent a direct ownership stake in the underlying asset. Instead, their value is based on the performance or movement of the asset.

A Security That Is Neither Debt nor Equity but Derives