Derivatives are so called because

A. they are subsidiary products in the market

B. they are derived from combination of different assets

C. their value is dependent on the value of some other fundamental variable

D. they are traded on derivative exchanges

Answer: Option B

Solution(By Examveda Team)

Derivatives are so called because they are derived from combination of different assets. A derivative is a contract between two parties which derives its value/price from an underlying asset. The most common types of derivatives are futures, options, forwards and swaps. Description: It is a financial instrument which derives its value/price from the underlying assets.