5 Questions
What is a derivative in the context of finance?
A financial contract whose value is based on the price of an underlying asset
How do derivatives allow investors to speculate on price movements?
By entering into a contract based on the asset's value changes
What determines the profit or loss for investors in derivatives?
How the asset's value changes
If an investor thinks that the price of shares of HDFC Bank may rise in the future, how can they speculate on this price movement without owning shares of HDFC Bank?
By buying derivatives of HDFC Bank
What is the primary function of an equity derivative in finance?
To bet on the future price movement of the underlying shares
Test your knowledge of derivatives with this quiz! Explore the basics of financial instruments, learn about the significance of derivatives, and understand their connection to underlying assets.
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