Derivative securities are also called contingent claims because

A) their owners may choose whether or not to exercise them.
B) a large contingent of investors holds them.
C) the writers may choose whether or not to exercise them.
D) their payoffs depend on the prices of other assets.
E) contingency management is used in adding them to portfolios.

Derivative Securities

Financial instruments whose value is derived from the value of one or more underlying assets or benchmarks.

Contingent Claims

Financial derivatives that pay out based on the occurrence of specific events or conditions, such as options or certain types of insurance contracts.

Exercise

In financial terms, it refers to the act of invoking the right to buy or sell the underlying asset in a derivative contract.