Answer-The value of a derivative

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The value of a derivative

Question

The value of a

derivative

A Is fixed Correct Answer Incorrect Answer

B Fluctuates with market index Correct Answer Incorrect Answer

C Fluctuates with the value of underlying asset Correct Answer Incorrect Answer

D Fluctuates with the change in policy rates Correct Answer Incorrect Answer

E None of the above Correct Answer Incorrect Answer

Solution

Derivatives are so called because they have no value of their own. They derive their value from the value of the underlying asset. Similar conceptual question in Chapter tests on Derivatives

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