Which of the following is NOT a type of commodity derivative?*1 pointa. Oil futuresb. Stock swapsc. Gold optionsd. Wheat swaps
Question
Which of the following is NOT a type of commodity derivative?*1 pointa. Oil futuresb. Stock swapsc. Gold optionsd. Wheat swaps
Solution
The answer is b. Stock swaps. Stock swaps are not a type of commodity derivative. Commodity derivatives are financial instruments whose value is derived from a physical commodity like oil, gold, or wheat. Stock swaps, on the other hand, are a financial strategy involving the exchange of one equity-based asset for another.
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