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Index Derivatives? (1 Viewer)
- Thread starter DannyT23
- Start date
Not sure on Index derivatives (though, i haven't noticed them in the syllabus), but a derivative is a financial instrument used by exporters to protect themselves from currency fluctuations.
As an index is associated with a stock exchange, I'm guessing an index derivative is a way to protect against a fall in the value of stock interests held by businesses? seems logical to me, as a fall in a foreign market could be just as damaging as a fall in currencies (ie, say the company you export to collapses?)
Thats my guess, though it could be miles of. As i said above though, i'm yet to see the term in the syllabus, and as such wouldn't expect it to pop up in an exam.
As an index is associated with a stock exchange, I'm guessing an index derivative is a way to protect against a fall in the value of stock interests held by businesses? seems logical to me, as a fall in a foreign market could be just as damaging as a fall in currencies (ie, say the company you export to collapses?)
Thats my guess, though it could be miles of. As i said above though, i'm yet to see the term in the syllabus, and as such wouldn't expect it to pop up in an exam.