Logo
Pattern

Discover published sets by community

Explore tens of thousands of sets crafted by our community.

Derivative Instruments Basics

20

Flashcards

0/20

Still learning
StarStarStarStar

Mortgage-backed Securities (MBS)

StarStarStarStar

A type of asset-backed security that is secured by a mortgage or collection of mortgages.

StarStarStarStar

Real Estate Investment Trusts (REITs)

StarStarStarStar

Companies that own, operate, or finance income-generating real estate. REITs provide a way for individual investors to earn a share of the income produced through commercial real estate ownership without actually having to buy, manage or finance any properties themselves.

StarStarStarStar

Inflation-indexed Bonds

StarStarStarStar

Bonds where the principal is indexed to inflation. They are thus designed to cut out the inflation risk of an investment.

StarStarStarStar

Futures

StarStarStarStar

A financial contract obligating the buyer to purchase an asset, or the seller to sell an asset, at a predetermined future date and price.

StarStarStarStar

Exotic Options

StarStarStarStar

Options that have features making them more complex than commonly traded vanilla options.

StarStarStarStar

Convertible Bonds

StarStarStarStar

A type of bond that can be converted into a predetermined number of shares of the issuing company's stock during certain periods during its life, usually at the discretion of the bondholder.

StarStarStarStar

Swaps

StarStarStarStar

A derivative in which two counterparties exchange cash flows of one party's financial instrument for those of the other party's financial instrument.

StarStarStarStar

Warrants

StarStarStarStar

Long-term options that give the holder the right to buy a certain amount of a security at a specified price before the expiry.

StarStarStarStar

Commodity Futures

StarStarStarStar

Futures contracts where the underlying asset is a commodity like grain, precious metals, electricity, oil, beef, orange juice, and natural gas.

StarStarStarStar

Volatility Index (VIX) Futures

StarStarStarStar

Futures contracts that allow traders to hedge or speculate on the volatility of the stock market, based on the VIX index.

StarStarStarStar

Binary Options

StarStarStarStar

A type of options contract in which the payoff is either a fixed monetary amount or nothing at all.

StarStarStarStar

Asset-backed Securities

StarStarStarStar

Securities whose income payments and hence value are derived from and collateralized (or 'backed') by a specified pool of underlying assets.

StarStarStarStar

Collateralized Debt Obligations (CDOs)

StarStarStarStar

A type of structured asset-backed security with multiple 'tranches' that can be affected by the prepayment, default, and recovery rates of a set of diversified assets.

StarStarStarStar

Interest Rate Futures

StarStarStarStar

Futures contracts with an underlying instrument that pays interest.

StarStarStarStar

Weather Derivatives

StarStarStarStar

Financial instruments that can be used by organizations or individuals to hedge against the risk of weather-related losses.

StarStarStarStar

Options

StarStarStarStar

A financial derivative that gives the buyer the right, but not the obligation, to buy or sell an asset at an agreed-upon price within a certain period or on a specific date.

StarStarStarStar

Forwards

StarStarStarStar

A customized contract between two parties to buy or sell an asset at a specified price on a future date.

StarStarStarStar

Credit Derivatives

StarStarStarStar

A financial instrument used to manage exposure to credit risk, whereby the risk of default on a debt that is transferred from the holder of the debt to the seller of the derivative.

StarStarStarStar

Currency Futures

StarStarStarStar

Futures contracts to exchange one currency for another at a specified date in the future at a price (exchange rate) that is fixed on the purchase date.

StarStarStarStar

Equity Derivatives

StarStarStarStar

Financial instruments whose value is at least partly derived from one or more underlying equity securities.

Know
0
Still learning
Click to flip
Know
0
Logo

© Hypatia.Tech. 2024 All rights reserved.