Derivative instruments
A) require significant investments.
B) transfer financial risks.
C) transfer primary instruments.
D) are settled at the date of issuance.

Question

Quizplus · Accepted Answer

Derivative instruments transfer financial risks from one party to another, without requiring significant investments. They derive their value from an underlying asset, index, or reference rate and are settled at a later date (usually not at the time of issuance). They do not transfer primary instruments but are separate financial contracts that can be traded separately.

Derivative Instruments