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The value of a derivative security Group of answer choices

is unrelated to the value of the related security.

is worthless today.

is unable to be calculated.

depends on the value of the related security.

has been enhanced due to the recent misuse and negative publicity regarding these instruments.

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  1. 20 June, 14:33
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    D). Depends on the value of the related security.

    Explanation:

    A derivative security is demonstrated as the financial security whose value is dependent or reliant on another underlying asset like stocks, currencies, etc.

    As per the question, the value of 'derivative security' would greatly 'depend on the worth or value of the related security' on which it relies to determine its value. These securities may include futures contracts, forwards, or swaps, etc. whose value is relative to the value of basic assets possessed by the company or organization which they often use for risk management to hypothesize the future action with respect to the underlying assets of the company. Therefore, option D is the correct answer.
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