Commodity and derivative markets:

Question

Quizplus · Accepted Answer

Commodity and derivative markets enable the financial manager to adjust a firm's exposure to various business risks by offering instruments such as futures, options, and swaps, which can be used to manage risks related to fluctuations in prices, interest rates, currency exchange rates, and other variables. These markets do not necessarily provide additional sources of financing for corporate projects and can be exchange-traded or over-the-counter. While foreign currencies are often traded in these markets, they deal with a wide range of underlying assets, not just foreign currencies.

Commodity and Derivative Markets