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What is a Derivative?

What is a Derivative?

Sunday, April 30, 2017, 1:26 PM

A derivative is a type of financial instrument, whose value is derived from underlying assets. These underlying assets can be equities, interest rates, currencies and commodities. The general practice is to use derivatives as a risk management tool that allows an investor to transfer the risks attached with the underlying asset to the party who is willing to take it.
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