14 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 12th Jan, 2024
Answer (1)
Team Careers360 23rd 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

Amrita University B.Tech 2026
Apply
Recognized as Institute of Eminence by Govt. of India | NAAC ‘A++’ Grade | Upto 75% Scholarships
UPES B.Tech Admissions 2026
Apply
Ranked #43 among Engineering colleges in India by NIRF | Highest Package 1.3 CR , 100% Placements
UPES Integrated LLB Admission...
Apply
Ranked #18 amongst Institutions in India by NIRF | Ranked #1 in India for Academic Reputation by QS Rankings | 16 LPA Highest CTC
Great Lakes Institute of Mana...
Apply
Admissions Open | Globally Recognized by AACSB (US) & AMBA (UK) | 17.8 LPA Avg. CTC for PGPM 2025
Jain University, Bangalore - ...
Apply
NAAC A++ Approved | Curriculum Aligned with BCI & UGC
Nirma University Law Admissio...
Apply
Grade 'A+' accredited by NAAC | Ranked 33rd by NIRF 2025
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