A derivative may be

Question

A derivative may be

Quizplus · Accepted Answer

A derivative can be either an asset or a liability depending on whether its value has increased or decreased since it was acquired. For example, if a company bought a derivative that allows them to purchase a commodity at a fixed price in the future, and the price of the commodity increases, the derivative would be considered an asset because it has increased in value. However, if the price of the commodity decreases, the derivative would be considered a liability because the company would be obligated to purchase the commodity at a higher price than its current value.

A Derivative May Be