Fgh derivative

 

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Fgh derivative

A derivative is a  security  with a price that is dependent upon or derived from one or more underlying assets . The derivative itself is a contract between two or more parties based upon the asset or assets. Its value is determined by fluctuations in the underlying asset. The most common underlying assets include stocks , bonds , commodities , currencies , interest rates and market indexes . 

Derivatives either be traded over-the-counter (OTC) or on an exchange . OTC derivatives constitute the greater proportion of derivatives in existence and are unregulated, whereas derivatives traded on exchanges are standardized. OTC derivatives generally have greater risk for the counterparty than do standardized derivatives. 

Originally, derivatives were used to ensure balanced exchange rates for goods traded internationally. With differing values of different national currencies , international traders needed a system of accounting for these differences. Today, derivatives are based upon a wide variety of transactions and have many more uses. There are even  derivatives based on weather data , such as the amount of rain or the number of sunny days in a particular region.

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