Savers and borrowers began to make greater use of derivative markets during the 1980s because of the
A)increased volatility of interest rates.
B)fall in marginal income tax rates.
C)decline in inflation rates.
D)decline in unemployment rates.

Question

Quizplus · Accepted Answer

The increased volatility of interest rates during the 1980s made savers and borrowers more interested in using derivative markets to manage their risk. Derivatives allow parties to hedge against changes in interest rates, making them a useful tool in a volatile market.

Savers and Borrowers Began to Make Greater Use of Derivative