Question

What are derivative securities?

a.

Insurance policies that cover specific risks.

b.

Financial instruments whose value depends on underlying assets.

c.

Bonds issued by captive insurance companies.

d.

Securities backed by collateralized debt obligations.

Answer: (b).Financial instruments whose value depends on underlying assets. Explanation:Derivative securities are financial securities whose value depends upon primary valuables such as stock prices, exchange rates, and interest rates.

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Q. What are derivative securities?

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