Equity Derivatives Quiz

They provide voting rights in the company issuing the derivative

They offer a fixed rate of return over a specific period of time

They allow investors to speculate on the future price movements of stocks (correct)

They guarantee the repayment of the initial investment amount

Financial instruments whose value is based on the price of an underlying stock (correct)

Investment funds that hold a diversified portfolio of stocks and bonds

Bonds that pay a variable interest rate based on the stock market performance

Securities issued by a company that represent ownership in the company

They have a fixed expiration date, while stocks can be held indefinitely

They have voting rights in the company, while stocks do not provide voting rights

They offer guaranteed dividends, while stocks may or may not pay dividends

They derive their value from an underlying asset, while stocks represent ownership in a company (correct)