>> July 20, 2010
As a finance manager, you want to know simple meaning of derivatives. I think, example is best tool to simplified this murky finance term.
In financial sector, you can buy shares, bonds, debentures and mutual funds through derivative technique. Suppose, if you take any financial instrument for buying shares in future dates. Your given advance money will lock the price and you will have right to get shares with this price in future. Vendor can not demand more money than what he fixed and taken in past. Derivative tool is most benefited if there is risk of flactuation in market.
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