A derivative is a financial instrument whose value is determined by
A)a regulatory body such as the SEC.
B)an underlying security.
C)futures and options.
D)None of these options

Question

Quizplus · Accepted Answer

A derivative's value is determined by an underlying security or asset, such as a stock, bond, or commodity. Regulations and futures/options contracts may play a role in how derivatives are traded, but they do not directly determine the derivative's value. Therefore, option A and C are incorrect, and option D is not a valid choice.

A Derivative Is a Financial Instrument Whose Value Is Determined