A derivative instrument that gives the holder the right but not the obligation to do something is a/an
A)future contract.
B)swap contract.
C)performance contract.
D)options contract.

Question

Quizplus · Accepted Answer

An options contract gives the holder the right but not the obligation to buy or sell an underlying asset at a specified price and time. This is different from a future contract, which obligates the holder to buy or sell the underlying asset, and a swap contract, which involves the exchange of cash flows between two parties. A performance contract is not a commonly used term in finance or derivatives.

A Derivative Instrument That Gives the Holder the Right but Not