What do an option, a swap, a forward, and an OTC have in common?
A)They are all derivatives.
B)They are traded in the same market.
C)They have the same value.
D)They have nothing in common.
E) All of the above.

Question

Quizplus · Accepted Answer

All four of them are derivatives, which are financial assets that derive their values from other assets.
Key Takeaway: Derivatives help to measure and manage risk more effectively. But don't use it if you don't know it, because it can bring harmful consequences to your financial management.

What Do an Option, a Swap, a Forward, and an OTC