The Definition of a Derivative Requires Which of the Following

Multiple Choice

The definition of a derivative requires which of the following characteristics to be met?
I Its value changes in response to a change in an underlying variable such as a specified interest rate,price or foreign exchange rate.
II It must be settled on a net basis.
III It requires no initial net investment or it is smaller than for other types of contracts expected to have a similar response to changes in market factors.
IV It is to be settled at a future date.

A) I,II and III
B) I,II and IV
C) I,III and IV
D) II,III and IV