The buyer of a derivative is _______ comfortable assuming risk than the seller.
A)more
B)less
C)just as
D)Risk assumption has nothing to do with derivatives.

Question

Quizplus · Accepted Answer

The buyer of a derivative is more comfortable assuming risk than the seller because the buyer is typically seeking to profit from a particular market outcome, while the seller is typically seeking to hedge against potential losses. Therefore, the buyer is more willing to assume risk in pursuit of potential profits.

The Buyer of a Derivative Is _______ Comfortable Assuming Risk