Question

When, as, and if issued contracts, also known as when-issued (WI) securities ________?

1) are a form of derivative contract
2) can be purchased before the official issuance of a security
3) are not traded on any exchange
4) do not involve any risk

Answer 1

When-issued (WI) securities, also known as when, as and if issued contracts, are a form of derivative contract that can be purchased before the official issuance of a security. They involve some level of risk and are typically traded in the over-the-counter market.

Step-by-step explanation:

When-issued (WI) securities, also known as when, as and if issued contracts, can be purchased before the official issuance of a security. They are a form of derivative contract that allows investors to speculate on the future price of a security before it is officially issued.

This type of contract involves some level of risk, as the actual price of the security may differ from the anticipated price. WI securities are typically traded in the over-the-counter market rather than on an exchange.