Question

1) The value of a derivative security

Select one:
a. depends on the value of the related primitive security
b. can only cause increased risk.
c. is unrelated to the value of the related primitive security
d. is worthless today

2) Money market securities

Select one:
a. are short term
b. pay a fixed income
c. are highly marketable
d. all of the above

Answer 1

1.The value of a derivative security will always be depending upon the value of the underlying security and it can cause both Increased risk and decreased risk.

Rest of the statements are false because derivative is not worthless and it is not an related to primitive Securitiies.

Correct answer is option (A)

2. All of the given statement are true because money market securities are short term securities and they always pays fixed income and they are highly marketable. these are securities which are highly liquid in nature.

Correct answer is option (d) all of the above