A Derivative Security Can Best Be Defined As

Multiple Choice

A derivative security can best be defined as:

A) Reducing a firm's exposure to price or rate fluctuations
B) A financial asset that represents a claim to another financial asset.
C) A plot showing how the value of the firm is affected by changes in prices or rates.
D) Short-run financial risk arising from the need to buy or sell at uncertain prices or rates in the near future.
E) Long-term financial risk arising from permanent changes in prices or other economic fundamentals.