Financial Derivative
Posted by Ripon Abu Hasnat on Friday, June 13, 2014 | 0 comments
A derivative is a financial contract which derives its value from the performance of another entity such as an asset, index, or interest rate, called the "underlying". Derivatives are one of the three main categories of financial instruments, the other two being equities (i.e. stocks) and debt (i.e. bonds and mortgages). Derivatives include a variety of financial contracts, including futures, forwards, swaps, options, and variations of these such as caps, floors, collars, and credit default swaps. Most derivatives are marketed through over-the-counter (off-exchange) or through an exchange such as the Chicago Mercantile Exchange; while most insurance contracts have developed into a separate industry.
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