Question

Consider the following statements about the participants

Q: Answer-Consider the following statements about the participants in the derivatives market: 1. Hedgers use d...

Each participant has a unique role in the derivatives market, contributing to its overall functionality and liquidity.

in the derivatives market: 1. Hedgers use derivatives to manage or mitigate risk by taking positions opposite to their current holdings. 2. Speculators use derivatives to bet on future price movements, aiming to profit from market fluctuations. 3. Arbitrageurs exploit price differences in different markets to earn risk-free profits. 4. Brokers act as intermediaries, facilitating the trade of derivatives between buyers and sellers.

A 1 and 2 only

B 1, 2, and 3 only

C 2 and 4 only

D 3 and 4 only

E All of the above

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