CFA Level I · CFA Level I Exam · Introduction to Digital Assets
An analyst reviews a non-fungible token (NFT) representing a digital artwork. Which statement about the NFT is most accurate?
The most accurate statement is that an NFT carries a unique identifier recorded on a blockchain, so it cannot be exchanged one-for-one with another token. This non-fungibility suits unique assets such as artwork, unlike fungible currencies or reserve-backed stablecoins.
- AEach unit is interchangeable with every other unit, which supports its use as money
- BIts value is set by the issuer, who must hold reserves equal to the token's price
- CIt carries a unique identifier recorded on a blockchain, so it is not interchangeable with other tokensCorrect
Explanation
NFTs are unique tokens with distinct identifiers and metadata, making them non-fungible. Interchangeability describes fungible tokens, and reserve-backed pricing describes stablecoins.
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