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Please answer for the three descriptions, answers are in the pull down box. Thank you! 1. Basic concepts Derivatives are securities whose prices are dependent
Please answer for the three descriptions, answers are in the pull down box. Thank you!
1. Basic concepts Derivatives are securities whose prices are dependent on one or more underlying assets. Since the value of the securities is derived from the valu the underlying assets, the securities are called derivatives. Some examples of derivatives are: options, convertible fixed-income securities, warrants, rights offering, and swaps. Based on your understanding identify the type of each derivative described in the following table. Description Type of Derivative Swaps These securities are traded on organized exchanges, such as the Chicago Mercantile Exchange and the Chicago Board Options Exchange. Their value depends on other assets, such as 30-year Treasury bonds or foreign currencies. This bond has a maturity of 30 years and gives the owner the right to exchange his or her bond for common stock at a predetermined price directly from the issuer instead of purchasing from the open market. Convertible fixed-income securities Short-term options Warrants These options are attached to fixed-income securities that can be separated from the security. They give the owner of the option the right, but not the obligation, to purchase common stock of the company at a particular price during a specified period of timeStep by Step Solution
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