QUESTION 17-26 - provision(ii the instrument requires...

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26. What are the main distinctions between a traditional financial instrument and a derivative financial instrument? Three basic characteristics of derivative financial instruments distinguish derivatives from traditional financial instruments: (i) The instrument has one or more underlyings and an identified payment
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Unformatted text preview: provision; (ii) the instrument requires little or no investment at the inception of the contract; (iii) The instrument requires or permits net settlement....
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