What are options and futures? Option: Fixed deposits, Derivative instruments that derive their value from underlying assets, Independent financial instruments, Government bonds

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What are options and futures?

Fixed deposits

Derivative instruments that derive their value from underlying assets

Independent financial instruments

Government bonds

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Why are financial instruments like Futures & Options referred to as 'Derivatives'?

They are derived from traditional banking practices.

They derive their value from an underlying asset using mathematical concepts of 'Derivatives'.

Their value is independent of any underlying asset.

They are complex instruments only accessible to expert traders.

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Among these options, which is not a common type of derivative used in financial markets?

Swaps agreements

Futures contracts

Exchange-traded funds

Options contracts

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What financial instrument is considered an "improvisation" over forwards?

Stocks

Bonds

Options

Futures

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What financial instrument provides the holder with the right, but not the obligation, to buy or sell an underlying asset at a predetermined price?

Warrant

Swap Contract

Option Contract

Futures Contract

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What is the underlying asset of Nifty Futures?

Government bonds

The Nifty Index itself

A basket of commodities

Individual stocks within the Nifty 50 index