Glossary

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Derivative

A derivative is a financial contract or a contingent claim which derives its value from some other underlying financial asset e.g. stocks, bonds, exchange rates but also commodities e.g. oil, electricity, gold, silver etc are used as underlying assets. For commodities the most common contract are forwards and futures. For financial assets options of various kinds are the most common derivatives. Credit derivatives are derivatives where the underlying assets are loans and bonds or baskets of loans and bonds. The most common types are credit defaults swaps and collaterized debt obligations.

 

Questions: Magnus Wiktorsson
Last update: 2016 Aug 03 13:20:50. Validate: HTML CSS

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