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Mention three pros and cons for each of the following derivatives 1. futures 2. forwards 3. options

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Finance

Mention three pros and cons for each of the followingderivatives

1. futures

2. forwards

3. options

Answer & Explanation Solved by verified expert
4.2 Ratings (711 Votes)
1 Futures pros and cons are as follows Pros a These are traded on standardized markets or stock exchanges b Very low or negligible counterparty risk involved c Can be used to take large number positions on a stock at a single point of time since in futures we buy lots instead of buying a single quantity of stock Cons a Generally the capital required to invest in futures contract    See Answer
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Mention three pros and cons for each of the followingderivatives1. futures2. forwards3. options

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