Which of these is an example of a derivative?
A) In January, you sign a contract that you will buy a farmer's hay in August, and you fix the price at that time.
B) In January, you take an option on the hay, agreeing that you have the right to buy it in August, but not the obligation.
C) In January, you buy the farmer's land and hire the farmer to grow hay for you.
D) Both (a) and (b) are examples of derivatives.
E) All of (a) , (b) , and (c) are examples of derivatives.
Correct Answer:
Verified
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