C is corrent. The requirement is to identify the instrument that is not considered to be a derivative. A derivative instrument is a financial instrument or other contract with three characteristics: (1) it has one or more underlyings, (2) it has one or more notional amounts or payment provisions, (3) it requires no initial net investment or an investment that would be smaller than other contracts, and its terms require or permit net settlement. C is corrent because a bank certificate of deposit is not a derivative since it requires an initial investment, pays interest, and is settled at the maturity date by paying the amount of the CD plus interest.
A is incorrect because it meets the definition of a derivative.
A is incorrect because it meets the definition of a derivative.
D is incorrect because it meets the definition of a derivative.
|
