Financial instrument whose return is derived from the return on another instrument is known as a (n):

Question

Quizplus · Accepted Answer

A derivative security derives its value from the underlying asset or instrument, such as a stock, bond, or commodity. The return on a derivative security is dependent on the performance of the underlying asset or instrument. Examples of derivative securities include futures contracts, options, and swaps. Fixed income securities, equity securities, and money market securities do not derive their value from another instrument or asset.

Financial Instrument Whose Return Is Derived from the Return on Another