A derivative is a financial instrument whose value is determined by:
A) a regulatory body such as the FTC.
B) a primitive or underlying asset.
C) hedging a risk.
D) hedging a speculation.

Question

Quizplus · Accepted Answer

Derivatives are financial instruments whose value is derived from the value of an underlying asset, index, or reference rate. This underlying entity can be an asset, index, interest rate, or even another derivative.

A Derivative Is a Financial Instrument Whose Value Is Determined