Which of the following is not an underlying?
A)Price of oil on New York Exchange.
B)Bank of Canada interest rate.
C)Conversion into 10 common shares.
D)US dollar exchange rate.

Question

Quizplus · Accepted Answer

The underlying refers to the asset, index, or instrument upon which a derivative product is based. Options, futures, and other derivatives contracts are based on underlying assets, such as commodities, stocks, or currencies. Conversion into 10 common shares is not an underlying, but rather a process of exchanging one asset for another. A, B, and D are all examples of underlying assets for derivatives contracts.

Which of the Following Is Not an Underlying