2. Background on derivatives Derivatives trading has been popular since the futures market for wheat was established. Since then, traders, brokers, and speculators have been involved in transactions involving derivatives, leading to the evolution of the derivatives markets. Based on your understanding of the derivatives markets, answer the following questions The was an early marketplace for the buying and selling of futures contracts. occur when aggregate risk can be reduced by derivatives transactions between counterparties. Based on your understanding of the reasons why the derivatives markets have grown more rapidly than any other major market in recent years, complete the following statements Analytical techniques have been developed that have made it easier to establish prices Globalization and Integrative technologies have made it for counterparties in different markets to work with each other Globalization has increased both the importance of the currency markets and the need to the exchange rate risks associated with plobal trade The Black Scholes Option Pring Model was developed to help make a transparent basis for pricing hedoes, making the counterparties comfortable with deals The was an early marketplace for the buying and selling of futures contracts. Chicago Board of Trade cur when aggregate risk can be reduced by derivatives transactions between counterparties. New York Stock Exchange Basera roversetting or the reasons why the derivatives markets have grown more rapidly than any other major market in recent years, complete the following statements: Analytical techniques have been developed that have made it easier to establish prices, . Globalization and integrative technologies have made it for counterparties in different markets to work with each other. Globalization has increased both the importance of the currency markets and the need to the exchange rate risks associated with global trade The Black-Scholes Option Pricing Model was developed to help make a transparent basis for pricing hedoes, making the counterparties comfortable with deals occur when aggregate risk can be reduced by derivatives transactions between counterparties. Natural hedges bing of the reasons why the derivatives markets have grown more rapidly than any other major market in recent years, Nonsymmetric hedges brements: Analytical techniques have been developed that have made it easier to establish prices . Globalization and integrative technologies have made it for counterparties in different markets to work with each other. Globalization has increased both the importance of the currency markets and the need to the exchange rate risks associated with global trade The Black-Scholes Option Pricing Model was developed to help make a transparent basis for pricing hedges, making the counterpartiet comfortable with deals a Analytical techniques have been developed that have made it easier to establish prices, Globalization and integrative technologies have made it for counter different markets to work with each other fair Globalization has increased both the importance of the currency markets and the the exchange rate risks associated with global trade unfair The Black Scholes Option Pricing Model was developed to help make a transparent bass for pricing hedoes, making the counterparties comfortable with deals Based on your understanding of the reasons why the derivatives markets have grown more rapidly than any other major market in recent years, complete the following statements: Analytical techniques have been developed that have made it easier to establish prices, . Globalization and integrative technologies have made it for counterparties in different markets to work with each other Globalization has increased both the importance of the markets and the need to the exchange rate risks associated with easier global trade The Black-Scholes Options Pricing Model was developed harder ske a transparent basis for pricing hedges, making the counterparties comfortable with deals Analytical techniques have been developed that have made it easier to establish prices. Globalization and integrative technologies have made it for counterparties in different markets to work with each other. . Globalization has increased both the importance of the currency markets and the need to the exchange rate risks associated with global trade reduce The Black-Scholes Option Pricing Model was developed to help make a transparent basis hedges, making the counterparties comfortable with deals raise