Question

Which of the following does not describe​ derivatives? A. These financial instruments are often used to speculate. B. Insurance is required when purchasing derivative securities. C. They are assets that derive their economic value from an underlying​ asset, such as a stock or bond. D. These financial instruments are often used to hedge against risk

Answer 1

Answer:

B. Insurance is required when purchasing derivative securities

Explanation:

• A derivative is a contract that is drives its values to form the underlying entity and can be interest rates and assets and includes the insurance against the price movement such as hedging.

• Some of the common derivatives are the futures, swaps and the options and forwards.