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Q1. (a) Derivative markets provide several benefits to the financial ecosystem in terms of financial risk management, price discovery, offering certain operational advantages, and improving

Q1. (a) Derivative markets provide several benefits to the financial ecosystem in terms of financial risk management, price discovery, offering certain operational advantages, and improving market efficiency. Explain, in detail, how derivative markets offer each of these benefits to the overall financial ecosystem.

(24 marks)

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