In derivative markets, trade takes place in
A)assets such as bonds or common stock that derive their value from the value of the companies which issue them.
B)assets whose rates of returns must be derived from information published in financial tables.
C)assets that derive their value from underlying assets.
D)assets which are not allowed to be traded on organized exchanges.

Question

Quizplus · Accepted Answer

Derivative markets trade in assets that derive their value from underlying assets, such as options, futures, and swaps. These underlying assets can include commodities, currencies, stocks, and bonds. The value of the derivative is based on the value of these underlying assets. For example, a futures contract for crude oil is a derivative because its value is derived from the price of crude oil.

In Derivative Markets, Trade Takes Place in