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Which of the followings is applicable for Derivatives market? Select one: a. In this market investors...

Which of the followings is applicable for Derivatives market?

Select one:

a. In this market investors do not hold the underlying assets

b. In this market investors hold the underlying assets

c. This market is totally risk free

d. It is related to Financial products only

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Answer #1

Answer : option A

A.In this market investors do not hold the underlying assets.

A derivative market is a market which deals with securities/ stock exchange. The derivative value is derived from underlying assets and value may change due to fluctuations in underlying asset price .

The underlying assets for derivatives are stocks,commodities, currencies,bonds etc.

Derivaties are not totally risk free and it is not only related to financial products because derivatives include commodity trading also.

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