BUISENESS MANAGEMENT
RISK MANAGEMENT
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
Which of the following is not a derivative instrument?
|
|
Contract to sell corn
|
|
|
Option agreement to buy land
|
|
|
Installment sales agreement
|
|
|
Mortgage backed security
|
Explanation:
Detailed explanation-1: -Meaning of non-derivative in English A non-derivative asset is one whose value does not depend on the value of another asset such as a currency: Non-derivative financial instruments consist of trade and other receivables, cash and cash equivalents, and long-term debt.
Detailed explanation-2: -Common examples of derivatives include futures contracts, options contracts, and credit default swaps.
Detailed explanation-3: -Forward contracts and futures contracts are known as nonsecurities derivatives because they derive their value from something that is not a security. REITs are not derivatives.
There is 1 question to complete.