26. A derivative is a synthetic security which derives its price from a physical market security or commodity. Which is correct?

Select one:

a.

Derivative instruments provide actual funds for the issuer at their maturity.

b.

A derivative entitles the holder to exchange unspecified cash flows.

c.

A forward rate agreement is used to lock in an interest rate today that will apply at a future date.

d.

A derivative entitles the holder to receive a variable amount at maturity.

e.

A futures contract gives the holder the right but not the obligation to buy or sell the designated asset at a specified future date.