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22 Apr

Which one word captures the utility and danger of derivatives? [practice]

by David Harper, CFA, FRM, CIPM

Explore Risk Foundations with two practice questions. The blog is meant to give you a quick 5-min boost; here we answering some questions from Jorion Chapters. Answers develop the wiki; feel free to add discussion – David Harper

Jorion 1.5: List some derivatives traded on organized exchanges and on OTC markets.

Jorion 1.6: What feature makes derivatives particularly effective but also dangerous to use?

My answers are below. But if you want a richer answer, see the fabulous Satyajit Das.

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