Which of the following is not considered a derivative product?

A variable rate demand obligation (VRDO) is structured as a bond that has a variable interest rate, but it does not derive its value from an underlying asset or an index in the way that derivative products do. Derivatives are financial instruments whose value is contingent upon the performance of an underlying asset, rate, or index.

In contrast, products like interest rate swaps, futures contracts, and option contracts all are classic examples of derivatives. Interest rate swaps are agreements between parties to exchange interest rate cash flows, typically to manage exposure to fluctuations in interest rates. Futures contracts are agreements to buy or sell an asset at a future date at a predetermined price, which derives its value from the underlying asset or commodity. Option contracts give the holder the right, but not the obligation, to buy or sell an asset at a specified price before a certain date, again making it a derivative because its value is based on the performance of the underlying asset.

By understanding these characteristics, it's clear why variable rate demand obligations do not fit the definition of derivative products.