Answer Posted / rahul
derivative is an one kind of speculation device which can
use in stock market to earn good amount of money in shorter
period.for example if one farmer have 10 kg of rise which
current market price is 10*12=120, 120 is spot price and if
farmer wait for some month and he deal with other person,
come with contract and decide the future price of rise is
130, it is derive from spot price of rise and decided to
sale rise in future at rs 13 per kg.this type of
transaction called as derivative transaction. which means
price of rise decide through observation of current market
price, which help in reduce uncertain losses happen in
future due to market condition.
there is some component
like
hedging
arbitrage
all component of derivatives which use in transaction
Is This Answer Correct ? | 8 Yes | 0 No |
Post New Answer View All Answers
Which government started the LPG policy in India?
What is 'saving bank account'?
What is the key difference between private sector banks and the government sector banks?
Tell something about Pradhan Mantri Jan Dhan Yojna?
What is a normal distribution curve?
What is 'door-to-door banking'?
Full form of SIDBI? Does it play any role in removing unemployment?
What all ways a bill collector can collect his debt from a customer?
When was rbi nationalized?
What do you mean by demand deposit?
what do you mean by private equity transactions?
What do you mean by FDI?
what are the benefits of working as an actuary?
What happens when reserve bank of india reduces the bank rate by 1%?
What is the minimum amount of money that should be remitted through rtgs?