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DERIVATIVES
What is a derivative instrument in financial markets?
A derivative is a financial contract whose value is derived from an underlying asset such as stocks, bonds, commodities, currencies, interest rates, or market indices.
What is a futures contract in derivative markets?
Standardized exchange-traded contract for future asset delivery.
What are the four main types of derivative instruments?
The four main types are forwards, futures, options, and swaps, each used for hedging, speculation, or arbitrage purposes.
What is the intrinsic value of an option?
Difference between underlying asset price and strike price.
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