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Future and Options are:Select one:a.Derivative Marketsb.Stocksc.Hedgingd.Hedging

Question

Future and Options are:

Select one:

  • a. Derivative Markets
  • b. Stocks
  • c. Hedging
  • d. Hedging
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Solution

To determine which option best corresponds to "Future and Options," we can analyze each choice.

  1. Derivative Markets: Futures and options are types of derivatives. They derive their value from an underlying asset (such as stocks, commodities, or indices) and are used mainly for trading or hedging purposes.

  2. Stocks: Stocks represent shares of ownership in a company. While they can be traded and may be related to options (which can be based on stock performance), they are not synonymous with futures or options themselves.

  3. Hedging: This is a strategy used to mitigate risk, and futures and options can indeed be used as hedging tools. However, "hedging" does not directly represent future and options as a market type.

  4. Hedging (repeated option): This is identical to the previous point and doesn't contribute new information.

Conclusion

The best answer that directly relates to futures and options is a. Derivative Markets, as both futures and options fall under this category. This reflects the specific nature of futures and options in financial markets.

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