Entity: DERIVATIVES
Derivatives are financial instruments that derive their value from an underlying asset, index, or rate. In mathematics, derivatives quantify the sensitivity to change of a function's output with respect to its input. They show the instantaneous rate of change at a particular point on the graph of a function.
DERIVATIVES
Etymology
The term 'derivative' comes from the Latin word 'derivare,' meaning 'to derive or draw from.'
Definition
Derivatives are financial instruments that derive their value from an underlying asset, index, or rate. In mathematics, a derivative quantifies the sensitivity to change of a function's output with respect to its input.
Historical Context
Derivatives were originally used to ensure balanced exchange rates for internationally traded goods. They have evolved to become essential tools in modern finance and calculus.
Cultural Significance
Derivatives play a crucial role in financial markets, allowing investors to hedge risk, speculate on price changes, and manage exposure to various assets.
Related Concepts
Other related concepts include options, futures, swaps, and calculus, which all involve the use of derivatives in different contexts.
See Also
- DERIVATIVE Definition & Meaning - Merriam-Webster
- Understanding Derivatives: A Comprehensive Guide to Their Uses and Benefits
- Derivative - Wikipedia
- What is a Derivative? Derivatives Definition and Meaning — Photomath
- What is Derivatives? Definition of Derivatives, Derivatives Meaning - The Economic Times
A financial instrument that derives its value from an underlying asset, index, or rate. In mathematics, a derivative quantifies the sensitivity to change of a function's output with respect to its input.