The document discusses derivatives, including their growth and types. It provides examples of how derivatives like futures, forwards, options, and swaps work and how they can be used for hedging and speculation. The key types of derivatives are over-the-counter derivatives, which are privately negotiated between two parties, and exchange-traded derivatives, which are traded on organized exchanges.
6. Barings Bank Banking Industry Sir Francis Baring (founder),Nick Leeson Key people London Headquarters February 26, 1995 Defunct 1762 Founded ING Group Successor Collapsed (Purchased by ING). Fate
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18. HEDGING Wheat Farmer Miller Forward Contract Cash Wheat Both parties have reduced a future risk: for the wheat farmer, the uncertainty of the price, and for the miller, the availability of wheat. there is still the risk that no wheat will be available due to causes unspecified by the contract, like the weather, or that one party will renege on the contract.