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What are derivatives in economics?

Updated: 11/2/2022
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15y ago

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Derivatives are securities whose value is derived from the some other time-varying quantity. Usually that other quantity is the price of some other asset such as bonds, stocks, currencies, or commodities. It could also be an index, or the temperature. Derivatives were created to support an insurance market against fluctuations. source:www.economics.about.com

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