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Answer Posted / ruchi
Derivatives are the instrument whose valus depend on the
value of some undelying assest. we can say that it is a
side bet on that assest
Deri. are of 2 types
1-Futures
2-Options
Exp- a farmer anticipate he produce 2ton of wheat he has
requirement of momney. So he can enter in future or Option
contract and sell his future prodution at market rate and
recevied the money.
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