Which is not a financial derivative? (2024)

Which is not a financial derivative?

A fixed price contract for goods and services is not a financial derivative instrument, unless, the contract is standardized so that the market price risk therein can be traded in financial markets in its own right.

What are the 4 main types of financial derivatives?

In finance, there are four basic types of derivatives: forward contracts, futures, swaps, and options.

What are non financial derivatives?

Meaning of non-derivative in English

A non-derivative asset is one whose value does not depend on the value of another asset such as a currency: Non-derivative financial instruments consist of trade and other receivables, cash and cash equivalents, and long-term debt.

Which of the following is not an example of a financial derivative?

Final answer:

A commercial bill contract, a short-term unsecured note issued by corporations and financial institutions, is not a derivative financial instrument. Unlike derivatives, its value is based on the issuer's creditworthiness, not on an underlying asset or index.

What are financial derivatives?

Derivatives are financial contracts, set between two or more parties, that derive their value from an underlying asset, group of assets, or benchmark. A derivative can trade on an exchange or over-the-counter. Prices for derivatives derive from fluctuations in the underlying asset.

What are the top 5 derivatives?

Five of the more popular derivatives are options, single stock futures, warrants, a contract for difference, and index return swaps.

Which of the following is an example of a financial derivative?

Some of the more common derivatives include forwards, futures, options, swaps, and variations of these such as synthetic collateralized debt obligations and credit default swaps.

What are derivative and non derivative financial assets?

The main difference between financial derivatives and non-derivative securities is that derivatives are financial instruments whose value is derived from the underlying assets, while non-derivative securities are assets that have a value independent of any other security or asset.

What are non financial forms of investment?

A nonfinancial asset is an asset that derives its value from its physical traits. Examples include real estate and vehicles. It also includes all intellectual property, such as patents and trademarks.

What is a non example of financial?

Examples of non-financial assets include tangible assets, such as land, buildings, motor vehicles, and equipment, as well as intangible assets, such as patents, goodwill, and intellectual property.

Which is not a derivative quizlet?

A futures contract is a derivative, since its price movements are based on the movement of an underlying physical asset. An investment contract is not a derivative.

Which of the following is not a type of derivative?

Debentures are the marketable securities that businesses can issue to obtain long term financing. These are kind of bonds. Hence it can be concluded that Debentures are not the instrument of derivative market.

Which of the following is not an example of derivatives?

Expert-Verified Answer

Cash is not a derivative because it does not derive its value from another asset, unlike interest rate swaps, stock options, and forward contracts.

How many types of financial derivatives are there?

The four major types of derivative contracts are options, forwards, futures and swaps.

Is a loan a financial derivative?

Derivatives are much more complicated contracts than regular loans, bond and equity purchases and have very different accounting standards.

Why are they called financial derivatives?

A derivative is a security with a price that is dependent upon or derived from one or more underlying assets. The derivative itself is a contract between two or more parties based upon the asset or assets. Its value is determined by fluctuations in the underlying asset.

What is the most common derivative?

Futures, forward contracts, swap agreements, options, and caps and floors are the most popular rate derivatives. Futures and forwards are contracts that allow two parties to agree to exchange a set of payments at a future date, based on the prevailing interest rate at that time.

What are the three types of derivatives?

There are many types of derivative contracts including options, swaps, and futures or forward contracts.

What are the two most common derivatives?

Common underlying assets include investment securities, commodities, currencies, interest rates and other market indices. There are two broad categories of derivatives: option-based contracts and forward-based contracts.

Is a financial derivative an asset?

Derivatives may be financial assets and liabilities (e.g., interest rate swaps) or nonfinancial assets and liabilities (e.g., commodity contracts).

Where are derivatives in financial statements?

All derivatives are recognised on the balance sheet and measured at fair value. All financial assets must be classified into: – “loans and receivables”, – “held to maturity”, – “fair value through profit or loss” or – “available for sale” categories.

What is the best example of a derivative?

Examples of Derivatives

The current Exchange rate is 1 USD = 80 INR. The exporter decides to enter into a currency futures contract to sell USD and buy INR at the current exchange rate for the future date. Each futures contract represents a specific amount of foreign currency.

What are not derivatives?

A non-derivative asset is one whose value does not depend on the value of another asset such as a currency: Non-derivative financial instruments consist of trade and other receivables, cash and cash equivalents, and long-term debt.

What are financial derivatives on a balance sheet?

Derivative instruments are measured at fair value and generally classified as Positive replacement values and Negative replacement values on the balance sheet.

Which of the following is not a derivative instrument?

Common examples of derivatives includes forward contracts, future contracts, swaps or options. Therefore, answer is option (d) Variable annuity contracts.

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