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FAQs: Financial Markets


DERIVATIVES

What is a derivative?

Where can I find information on derivatives and derivative exchanges?


Question What is a derivative?

AnswerA derivative is a financial instrument whose price is derived from the value of one or more underlying assets, liabilities, or indices. Two general types of derivatives are privately negotiated contracts, called over-the-counter derivatives, and standardized derivatives that are often exchange-traded.

QuestionWhere can I find information on derivatives and derivative exchanges?

AnswerInformation on derivatives can be found on the International Swaps and Derivatives Association (ISDA) website. Links to derivatives exchanges can be found on the Commodity Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC) websites.


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