A derivative is a financial instrument whose value changes in response to changes in an underlying observable variable, such as a stock price, an interest rate, a currency exchange rate, or a commodity price.

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This statement is true. Derivatives are financial instruments that derive their value from an underlying asset, index, or reference rate. Their value changes in response to changes in the underlying observable variable. Examples of derivatives include options, futures, swaps, and forwards.

A Derivative Is a Financial Instrument Whose Value Changes in Response