Which of the following is NOT an example of a derivative financial instrument?
A) A forward exchange contract
B) A commercial bill contract
C) A futures contract
D) An option contract

Question

Quizplus · Accepted Answer

Commercial bill contracts are not considered a derivative financial instrument because they are short-term debt obligations that arise from everyday business transactions, such as buying and selling goods or services. Derivatives, on the other hand, derive their value from an underlying asset or benchmark, and are used for speculative or hedging purposes. A forward exchange contract, futures contract, and option contract are all examples of derivatives.

Which of the Following Is NOT an Example of a Derivative