Derivatives - Derivatives Section 1

Avatto>>CFA Level 1>>PRACTICE QUESTIONS>>Derivatives>>Derivatives Section 1

1. Which of the following is not a derivative?

  • Option : C
  • Explanation : Mutual funds do not transform the value of a payoff of an underlying asset; they merely pass those payoffs through to their holders. Hence they are not derivatives.
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4. Which of the following statements about derivatives is not true?

  • Option : C
  • Explanation : Derivatives are not created in the spot market, which is where the underlying trades
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