2-1 what are the three common ways in which derivatives are misuded?
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what are the three common ways in which derivatives are misuded?
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- 2-4 What are the two settlement procedures, "advanced set, settled in arrears" and "advanced set, advanced settled" for interest rate derivatives, and which of these procedures would reduce credit risk?4. Outline and discuss the role of derivatives in risk management with particular reference to the history of derivatives, the types of derivative and the hedging opportunities available.3 Why is an interest rate swap equivalent to a series of forward contracts? Explain
- Answer True or False to the following Explain your answer.Question 1“The interest parity condition holds exactly in practice.”What are the economic benefits of derivatives? Provide at minimum therebenefits. Explain each.H2. What is meant by the terminology that an option is in-, at-, or out-of-the-money
- Q18. Which of the following is(are) true about derivatives? I An agreement that derives its value from an underlying asset. II Value of the derivative contract is fixed throughout the tenure. III Derivatives can be arranged over-the-counter or bought on an exchange. Group of answer choices 1. I and III 2. I and II 3. II and III 4. I onlyQuestion 1). answer true or false to the following statement and explain: “The interest parity condition holds exactly in practice.”3.How can options, futures, and forward contracts be used to devise simple hedging strategies? Discuss similarities and differences between futures contracts and forward contracts.