BANKING AFFAIRS

Detailed explanation-1: -Derivatives are one of the most widely traded instruments in financial world. Value of a derivative transaction is derived from the value of its underlying asset e.g. Bond, Interest Rate, Commodity or other market variables such as currency exchange rate.

Detailed explanation-2: -A derivative is an instrument whose value is derived from the value of one or more underlying, which can be commodities, precious metals, currency, bonds, stocks, stocks indices, etc. Four most common examples of derivative instruments are Forwards, Futures, Options and Swaps. 2. What are Forward Contracts?

Detailed explanation-3: -Financial derivatives are financial instruments that are linked to a specific financial instrument or indicator or commodity, and through which specific financial risks can be traded in financial markets in their own right.