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Answer Posted / babhu kanchupalli(dms)
Derivative is an asset which value is derived from the another asset called underlying asset.
For example : A&B made a bet on cricket match for 500 rc.Indirectly it means they are entering into a contract.Here this contract is called a derivative value of 500.The execution of this contract is depends on the match result.one person gain will be the another person loss vice versa.The match result is the underlying asset.
Futures,forwards,options,swaps are the examples of financial derivatives.
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