Understanding Financial (Stock) Derivatives

What is the value of a derivative based on?

• It depends on itself

• It depends on external factors

• It depends on the stock market

• It depends on the government

Which is the most famous form of derivative?

• Stock options

• Futures contracts

• Mortgages

• Real estate

What causes the value of a derivative to fluctuate?

• The derivative itself

• External factors

• The stock market

• The government

What happened to the value of derivatives during the financial collapse?

• They remained stable

• They increased in value

• They decreased in value

• They became worthless

What was the root cause of the financial collapse?

• Derivatives

• Stock market crash

• Mortgages going bad

• Government intervention

What is the value of a derivative if the main asset does not exist?

• It has no value

• It remains the same

• It increases in value

• It decreases in value

What are some other types of derivatives?

• Stock options and futures contracts

• Real estate and mortgages

• Government bonds and stocks

• Currency exchange and commodities

What is the value of a derivative if the main asset is performing well?

• It increases in value

• It remains the same

• It decreases in value

• It becomes worthless

What is the value of a derivative if the main asset is performing poorly?

• It remains the same

• It increases in value

• It decreases in value

• It becomes worthless

What is the relationship between a derivative and the main asset?

• The derivative influences the main asset

• The main asset influences the derivative

• They have no relationship

• They are independent of each other