1. Why are they used in financial markets? 

2. What are the main types of derivatives? 

3. How do futures contracts differ from options contracts? 

4. What is the concept of leverage in derivative trading? 

5. How are derivatives valued and priced? 

6. What are the main risks associated with trading derivatives? 

7. How do derivatives help manage financial risk? 

8. What is the difference between over-the-counter (OTC) derivatives and exchange-traded derivatives? 

9. How are derivatives used in hedging strategies? 

10. Explain the concept of arbitrage in the context of derivatives. 

11. What role do derivatives play in speculative trading? 

12. How do interest rates affect the pricing of derivatives? 

 

Answer rating: 100% (QA)

1 Why are they used in financial markets Derivatives are used in financial markets for various reasons a Risk Management Derivatives provide a means for market participants to manage and mitigate fina... View the full answer