What are the types of derivative?
- Forward - the obligation to buy or sell a defined amount of a specific underlying asset, at a specified price at a specified future date.
- Forward rate agreements - a contract to fix the interest charge on a floating rate loan.
- Futures contracts - the obligation to buy or sell a standard quantity of a specific underlying item at a specified future date.
- Swaps - an agreement to exchange periodic payments at specified intervals over a specified time period.
- Options - the right, but not the obligation, to buy or sell a specific underlying asset on or before a specified future date.
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