Respected Sir,
I want to know that what is Deriatives? How it works?
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Answer Posted / vasavi
Ans: A derivative is anything that is valued based upon some
other asset. In other words, it derives its value from
something else.For example: In the case of GE stock options,
for instance, whether the stock option makes money, loses
money, or breaks even depends entirely upon what General
Electric shares do. Thus, the options “derive” their value
from GE stock. They are a derivative.
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