31 Views

Question : Which of the following is an example of a derivative instrument?

Option 1: Treasury bills
  

Option 2: Common stocks
  

Option 3: Options contracts

   

Option 4: Corporate bonds


Team Careers360 9th Jan, 2024
Answer (1)
Team Careers360 11th Jan, 2024

Correct Answer: Options contracts

   


Solution : The correct answer is (c) Options contracts.

Options contracts are an example of derivative instruments. Derivatives are financial instruments whose value is derived from an underlying asset or benchmark. They are often used for hedging, speculation, or managing risk. Options contracts give the holder the right, but not the obligation, to buy (call option) or sell (put option) a specified underlying asset at a predetermined price (strike price) within a specific period of time. Options are commonly traded in options markets, and they can be based on various underlying assets such as stocks, commodities, currencies, or indexes.

Related Questions

Amity University-Noida B.Tech...
Apply
Among top 100 Universities Globally in the Times Higher Education (THE) Interdisciplinary Science Rankings 2026
BML Munjal University | B.Tec...
Apply
A Hero Group Initiative | Up to 100% Scholarships | Highest CTC 32.99 LPA | Average CTC 8.45 LPA | Accepts JEE Score | Applications Closing Soon!
SRM University A.P UG Admissi...
Apply
UG Admissions Open 2026 | Highest CTC 52 LPA | Average CTC 9.09 LPA | 60+ Collaborations with the world's best Universities
Amity University-Noida MBA Ad...
Apply
Ranked among top 10 B-Schools in India by multiple publications | Top Recruiters-Google, MicKinsey, Amazon, BCG & many more.
Amity University-Noida BBA Ad...
Apply
Among top 100 Universities Globally in the Times Higher Education (THE) Interdisciplinary Science Rankings 2026
Poddar Business School PGDM A...
Apply
Highest CTC 24 LPA | Average CTC 8.5 LPA | 1600+ Recruiters | 165+ Corporates Linkages
View All Application Forms

Download the Careers360 App on your Android phone

Regular exam updates, QnA, Predictors, College Applications & E-books now on your Mobile

150M+ Students
30,000+ Colleges
500+ Exams
1500+ E-books