Question
The value of derivative is determined by
Solution
Derivatives are so called because they have no value of their own. They derive their value from the value of some other asset, which is known as the underlying. For example, a derivative of the shares of Infosys (underlying), will derive its value from the share price (value) of Infosys. Similarly, a derivative contract on soybean depends on the price of soybean.Β
More Alternate Sources of Finance Questions
- What is Policy Repo Rate, as of October 2022?
- Under which conditions can a company declare or pay dividends for a financial year as per the Companies Act?
- The theory which focusses on consequences of greater good and evil ___________.
- The government had introduced a scheme to ensure the easy availability of credit to exporters while reducing export-associated risks. Which of the followin...
- The treasury bills issued in India are in the nature of _________ Β
- Which of the following analytics types is most suitable for answering the question, "What should we do to achieve the best outcome?"
- An insurance company wants to estimate the average claim amount for motor insurance policies. They take multiple random samples of 50 claims each from a ...
- A company did sales of Rs.1 lakh during the year. It had total purchases of Rs.75000 of which Rs.2000 worth was returned. The company paid Rs.2000 for carr...
- Bad debts Recovered `1,000 will be credited to which among the following accounts?
- Contingent Liabilities should be reflected by a business organization as the possible future obligations. In which of the following statements are Continge...