Question: Answer the following questions in complete sentences using proper grammar and spelling. These are not short answer questions. 1. Explain what derivatives are and how

Answer the following questions in complete sentences using proper grammar and spelling. These are not short answer questions.

1. Explain what derivatives are and how these securities affect risk.

2. Name and briefly explain the 3 major categories of derivatives.

3. Name and briefly explain the 2 types of calls and puts.

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