Derivatives
Financial instruments whose value is derived from an underlying asset.
Derivatives are financial instruments whose value is derived from an underlying asset, such as stocks, bonds, commodities, or currencies. Examples include options, futures, forwards, and swaps. Derivatives are used for hedging, speculation, and risk management purposes. Analysts must understand the mechanics and risks associated with derivatives to effectively use them in investment strategies.
Concepts covered: Valuation of Contingent Claims, Pricing and Valuation of Forward Commitments
Time: 5 minutes Questions: 5
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