The value of derivative securities depends on the value of:
A)the company value derived from analysts expectations.
B)some underlying security.
C)market interest rates.
D)the structure of the business.

Question

Quizplus · Accepted Answer

Derivative securities derive their value from an underlying security, such as stocks, bonds, commodities, or currencies. This underlying security forms the basis for the price movements of the derivative, and affects the potential gains or losses for the investor. Therefore, the value of derivative securities ultimately depends on the performance and fluctuations of the underlying asset or security.

The Value of Derivative Securities Depends on the Value Of