NISM Series VIII Practice Questions - NISM-Series-VIII Equity Derivatives Certification Examination Exam

Which of the following is a key economic function served by derivatives markets?

Eliminating all investment risk from the financial system Guaranteeing capital appreciation on the underlying shares Providing interest-free loans to traders Price discovery and transfer of risk from hedgers to those willing to bear it

Correct Answer:

Price discovery and transfer of risk from hedgers to those willing to bear it

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