Which of the following statements is incorrect?
A) Derivative instruments derive their value from the price of the underlying financial instrument.
B) Derivative instruments give the holder the right, but not the obligations, to buy or sell a financial assets.
C) Derivative instruments can be used for speculative purposes.
D) Derivative instruments can be used for accomplishing a specific financial objective.
E) None of the above.

Question

Quizplus · Accepted Answer

Not all derivative instruments give the holder the right but not the obligation; for example, futures contracts obligate the holder to buy or sell the underlying asset.

Which of the Following Statements Is Incorrect