Asked by Anggy Alvarado on May 28, 2024
Verified
A financial asset that represents a claim on another financial asset is called a(n) ____________.
A) initial public offering
B) derivative security
C) seasoned equity offering
D) Eurobond
E) subjugated (or junior) stock
Derivative Security
A derivative security is a financial instrument whose value is based on the performance of underlying assets, indexes, or other financial instruments.
Financial Asset
A financial asset refers to any asset that is cash, a contractual right to receive cash or another financial asset from another entity, or a contractual right to exchange financial instruments with another entity under conditions that are potentially favorable.
Claim
A demand for something as due, often referring to a right to payment or other benefits.
- Acquire knowledge about the primary definitions and purposes of various derivative instruments such as futures, options, and swaps.
Verified Answer
FM
Fernanda MorenoJun 02, 2024
Final Answer :
B
Explanation :
Derivative securities are financial instruments whose value is derived from the value of another asset, which they represent a claim on. This includes options, futures, and swaps, among others.
Learning Objectives
- Acquire knowledge about the primary definitions and purposes of various derivative instruments such as futures, options, and swaps.