Derivatives create either rights or obligations that meet the definition of assets or liabilities.

Name: Derivatives create either rights or obligations that meet the definition of assets or liabilities.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Derivatives are financial instruments which derive their value from an underlying asset or index. They can create either asset or liability for the parties involved, depending on whether they have bought or sold the derivative. Therefore, they meet the definition of assets or liabilities.

Derivatives Create Either Rights or Obligations That Meet the Definition