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what is the definition of derivative,
what is a security?
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Answer Posted / surendra thiruveedhula
A derivative is a financial security whose price is derived
from an another asset.
The asset is called underlying asset which means stock,
bond,any marketable securities.
If the price of underlying asset changes,then the price of
derivative changes as well.
Many corporations go for financial derivatives, because the
risk would transferable between two parties.
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