An asset whose value is based on the value of another asset is called:
A)a derivative.
B)a dividend.
C)a stock.
D)a bond.

Question

Quizplus · Accepted Answer

A derivative is a type of financial instrument whose value is derived from the value of an underlying asset, such as a stock, commodity, or currency. Derivatives can be used for a variety of purposes, including hedging against risk, speculating on price movements, or gaining exposure to an asset without actually owning it. None of the other options listed involve an asset whose value is based on the value of another asset.

An Asset Whose Value Is Based on the Value of Another