Which of the following statements is true?
A)The ability to settle the derivative by actually buying or selling the related asset is referred to as net settlement.
B)The quantity or number of units specified by a derivative is known as the underlying.
C)A derivative instrument derives its value from a related asset or liability.
D)Usually, a derivative instrument requires little or no initial investment.

Question

Which of the following statements is true?
A)​The ability to settle the derivative by actually buying or selling the related asset is referred to as net settlement.
B)​The quantity or number of units specified by a derivative is known as the underlying.
C)​A derivative instrument derives its value from a related asset or liability.
D)​Usually, a derivative instrument requires little or no initial investment.

Quizplus · Accepted Answer

The Answer is D

Which of the Following Statements Is True