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American Bankers Association CTFA Exam - Topic 8 Question 67 Discussion

Financial instrument whose return is derived from the return on another instrument is known as a/an:
C) Equity security
A) Derived security
B) Fixed income security
D) Money market security

American Bankers Association CTFA Exam - Topic 8 Question 67 Discussion

Actual exam question for American Bankers Association's CTFA exam
Question #: 67
Topic #: 8
[All CTFA Questions]

Financial instrument whose return is derived from the return on another instrument is known as a/an:

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Suggested Answer: C

by Glory at Jun 03, 2024, 07:01 AM

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Pete
9 months ago
I thought it was called something else, like equity security?
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Lura
9 months ago
Derived securities are linked to other instruments, true!
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Denae
9 months ago
Wait, is it really called that? Sounds off.
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Tiara
10 months ago
Totally agree, that's the right term.
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Tyra
10 months ago
It's definitely a derived security!
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Lindsey
10 months ago
I remember practicing questions on derivatives, and I think "Derived security" was the term used. It makes sense, but I hope I'm not mixing it up with something else!
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Tambra
10 months ago
I'm a bit confused. I thought "Fixed income security" could also fit, but now that I think about it, it doesn't really derive from another instrument.
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Kiley
10 months ago
I feel like I've seen a similar question before, and it was definitely about something that derives its value from another asset. "Derived security" sounds right to me.
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Mary
11 months ago
I think the answer might be "Derived security," but I'm not completely sure. I remember something about how derivatives are linked to other assets.
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Gregg
11 months ago
I'm a little confused by the wording of this question. Let me re-read it and try to break down the key terms to determine the right answer.
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Ardella
11 months ago
I've got this! Derived securities are instruments whose returns are based on the returns of another underlying asset. The other options don't have that direct link.
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Sherill
11 months ago
Okay, I know derived securities are linked to the performance of another instrument. I just need to confirm how that differs from the other choices.
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Stefania
11 months ago
This looks like a straightforward question on financial instruments. I'll focus on recalling the key characteristics of different security types.
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Eliz
11 months ago
Hmm, I'm a bit unsure about the difference between a derived security and the other options. Let me think this through carefully.
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Lenita
11 months ago
This is a tricky one. I'm not entirely sure where the errors and warnings would be located, but I'll make my best guess based on the information provided.
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Rueben
11 months ago
Hmm, I'm a bit confused. The question gives the original price, new price, and total revenue, but doesn't explicitly state the quantity. How do we calculate the percentage change in quantity?
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Leila
11 months ago
Hmm, I'm a bit unsure about this one. I know the cloud service models have different levels of control and management, but I'm not sure which one would be best for migrating an existing application. I'll need to review my notes on the cloud service models.
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Wilda
11 months ago
This looks like a straightforward VPN topology question. I think I can work through this step-by-step to get the right answer.
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Letha
1 year ago
I heard the exam has a new question: 'What do you call a financial instrument that's always late? A Derivative-ly.'
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Mendy
1 year ago
C) Equity security
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Sean
1 year ago
B) Fixed income security
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Alica
1 year ago
A) Derived security
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Adell
1 year ago
Money market security? Really? I think I need to brush up on my financial instrument knowledge.
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Harrison
1 year ago
User 2
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Eliseo
1 year ago
User 1
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Myra
1 year ago
I'm not sure, but I think it could also be D) Money market security.
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Malcolm
1 year ago
Equity security? No way, this is clearly a derivative we're talking about!
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Kallie
1 year ago
Hmm, I'd go with fixed income security. Doesn't that sound right?
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Princess
1 year ago
A derivative security, of course! That's the correct answer.
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Tomoko
1 year ago
I always get confused between derivative and fixed income securities.
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Casie
1 year ago
Derivative securities can be quite complex to understand.
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Sheridan
1 year ago
I wasn't sure about that one, thanks for clarifying.
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Peggie
1 year ago
Yes, you're right! It's a derivative security.
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Daniel
1 year ago
I agree with Henriette, because a derived security's return is based on another instrument.
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Henriette
1 year ago
I think the answer is A) Derived security.
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