Purchase Solution

Derivatives Market

Not what you're looking for?

Ask Custom Question

Discuss why derivative markets are better suited to control some risks (commodity price changes, natural disasters) than other financial or insurance markets. For instance why did active derivative markets develop for catastrophe insurance and credit default swaps? Why might derivative markets prove ineffective? For example, what went wrong with the market for credit default swaps?

Purchase this Solution

Solution Summary

The solution determines why derivative markets are better suited to control some risks than other financial or insurance markets.

Solution Preview

Credit derivatives, as tools in enhancing returns and managing risks, have been growing in prominence as well as size in the derivatives market. Credit default swaps or CDS, according to Spentzos (2008), are the "building blocks in the credit derivatives market and represent half of its volume" (p. 314). In a CDS, the protection buyer or ...

Purchase this Solution

Free BrainMass Quizzes
Understanding the Accounting Equation

These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.

Six Sigma for Process Improvement

A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.

Operations Management

This quiz tests a student's knowledge about Operations Management

Cost Concepts: Analyzing Costs in Managerial Accounting

This quiz gives students the opportunity to assess their knowledge of cost concepts used in managerial accounting such as opportunity costs, marginal costs, relevant costs and the benefits and relationships that derive from them.

Organizational Leadership Quiz

This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.