Do you feel that complex derivative contracts should be highly regulated or banned? What types of regulations do you feel would be particularly beneficial? Detrimental? Discuss.© BrainMass Inc. brainmass.com December 15, 2020, 5:21 pm ad1c9bdddf
Derivatives were created to fill needs within the business community. More often than not, they are used to control a business's exposure to loss (i.e., as a hedge or insurance policy). In some cases, they are used for speculation; however, with the advent of powerful computers, even "speculation" is somewhat controlled because speculators can review historical trends and obtain timely information to make an educated prediction of prices. Given these facts, I do not think that complex derivative contracts should be banned.
Before I discuss "beneficial" and "detrimental" regulation, we need to determine ...
The solution discusses if complex derivative contracts should be highly regulated or banned.