Derivatives Market Users and Key Differences from Cash Market

Not dependent on any underlying asset

Traded on physical commodity exchanges

Value remains constant regardless of market fluctuations

Value derived from one or more underlying variables (correct)

Increases the chances of default

Helps in determining profit/loss on maturity (correct)

Makes them independent of market risks

To ensure they have no value

Breaks even

Suffers a loss

Makes a profit (correct)

Has no impact

<p>Price change in a forward contract equals price change in the underlying</p> Signup and view all the answers

<p>In absence of a valuable underlying asset</p> Signup and view all the answers