Question

What is a derivative security?

a.

A financial security with a fixed value

b.

A financial security whose value depends on primary variables

c.

A financial security issued by the government

d.

A financial security that can only be traded on a specific exchange

Posted under IC85 Reinsurance Management

Answer: (b).A financial security whose value depends on primary variables Explanation:A derivative security is a financial security whose value depends upon more primary variables such as stock prices, exchange rates, and interest rates.

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