NCFM Derivatives Market (Dealers) Practice Questions - NCFM Derivatives Market (Dealers) Module Exam

Which of the following is the primary economic function of a derivatives market?

To guarantee fixed returns to retail investors To transfer risk from risk-averse participants to those willing to bear it To eliminate price volatility in the underlying cash markets To provide interest-free short-term financing to corporate issuers

Correct Answer:

To transfer risk from risk-averse participants to those willing to bear it

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