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The market risk inherent in the underlying asset is attached to the financial derivative through contractual agreements and hence can be traded separately. [11] The underlying asset does not have to be acquired. Derivatives therefore allow the breakup of ownership and participation in the market value of an asset. This also provides a ...
Derivatives are a kind of financial security that get their value from another underlying asset, such as the price of a stock, a commodity such as gold or even interest rates. Many kinds of ...
Financial instruments are monetary contracts between parties. They can be created, traded, modified and settled. They can be cash (currency), evidence of an ownership, interest in an entity or a contractual right to receive or deliver in the form of currency (forex); debt (bonds, loans); equity (); or derivatives (options, futures, forwards).
The Capital Markets Authority of Kenya (CMA) is a government financial regulatory entity responsible for supervising, licensing and monitoring the activities of the capital markets within the Republic of Kenya, market intermediaries, including the stock exchange, and the central depository and settlement system and all other persons licensed under the Capital Markets Act of Kenya.
A fund derivative is a financial structured product related to a fund, normally using the underlying fund to determine the payoff. This may be a private equity fund , mutual fund or hedge fund . Purchasers obtain exposure to the underlying fund (or funds) whilst improving their risk profile over a direct investment.
The derivatives market is the financial market for derivatives - financial instruments like futures contracts or options - which are derived from other forms of assets. The market can be divided into two, that for exchange-traded derivatives and that for over-the-counter derivatives. The legal nature of these products is very different, as well ...
A financial derivative is a financial instrument whose value is derived from a commodity termed an underlier. [3] Derivatives are either exchange-traded or over-the-counter (OTC). An increasing number of derivatives are traded via clearing houses some with central counterparty clearing , which provide clearing and settlement services on a ...
A foreign exchange derivative is a financial derivative whose payoff depends on the foreign exchange rates of two (or more) currencies. These instruments are commonly used for currency speculation and arbitrage or for hedging foreign exchange risk .