The most important derivative instruments are
A) futures, options, and swaps.
B) common and preferred stocks.
C) corporate bonds.
D) government bonds.

Question

Quizplus · Accepted Answer

Futures, options, and swaps are the most important derivative instruments as they allow investors to manage financial risks by entering into contracts based on underlying assets such as stocks, bonds, commodities, or currencies. Common and preferred stocks, corporate bonds, and government bonds are not derivative instruments, as they represent ownership in a company or a fixed-income security.

The Most Important Derivative Instruments Are