Question

what is the difference between a non trading derivative versus "other than equity security?" ?

what is the difference between a non trading derivative versus "other than equity security?" ?

Homework Answers

Answer #1
  • Loans and receivables are non trading derivative financial assets with fixed and determinable payments which are not quoted in an active market. They arise when an entity provides money, goods or services directly to a debtor with no intention of trading.
  • "Other than equity security" is other than stock. Its examples are bonds and options.
  • Non-equity securities can fluctuate in value in relation to stocks. Like, future contracts can increase in price as stocks increase, while bond prices tend to move inversely to stock prices.
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