A security that is neither debt nor equity but derives its value from an underlying asset is called a(n)
A) derivative security.
B) hybrid security.
C) option.
D) operating lease.

Question

Quizplus · Accepted Answer

A derivative security derives its value from an underlying asset, such as a commodity, currency, or stock. It is neither debt nor equity and is used to manage risk or speculate on future prices or market conditions. Examples of derivative securities include options, futures, swaps, and forwards.

A Security That Is Neither Debt nor Equity but Derives