Canadian Securities Course (CSC) Level 1 Practice Exam

What are the 5 commodities that underlie derivative contracts?

1. Equities, Interest rates, and currencies.

2. Grains and oil seeds.

3. Livestock and meat.

4. Energy products.

The correct answer is: Grains and oil seeds.

The correct answer is B. Grains and oil seeds. Derivative contracts are financial instruments whose value is derived from the value of an underlying asset. In the case of commodity derivative contracts, the underlying asset is a physical commodity. The five commodities that underlie derivative contracts are grains and oil seeds, livestock and meat, energy products, precious metals, and base metals. Therefore, options A, C, and D are incorrect as they do not cover all five commodities that underlie derivative contracts.