Respuesta :
The given statement exists true. Corporations employ derivatives as a practical instrument for managing particular parts of the firm's risk. Neither debt nor equity security, an option gets its value from an underlying asset, which is frequently another security.
What is a derivative security?
Financial instruments known as derivatives derive their values from other assets like stocks, bonds, or foreign exchange. Using derivatives can help protect against the danger of an asset's decline or to make predictions about how the underlying instrument will move in the future.
Derivative security gets its value from an underlying asset rather than being either debt or equity. A financial instrument whose value is based on the value of another asset is referred to as derivative security. Futures, forwards, options, and swaps are the four primary categories of derivatives. A convertible bond is an illustration of derivative security.
Therefore, the correct answer is option a. true.
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