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What is the Definition of Derivatives?

What is the Definition of Derivatives?

Contracts that derive their value from an underlying financial asset, such as publicly traded securities and foreign currencies. Often used as a hedge against changes in value.

Source: Insurance Handbook A guide to insurance: what it does and how it works |

Label: Insurance
Theme: Dictionary of Insurance Terms

Other Questions: What is the definition of Insurance?

What is the Definition of Derivatives?

What is the Definition of Derivatives?

Check out other definition of insurance terms below:

What is the Meaning of ADMITTED COMPANY In Insurance Terms?

An insurance company licensed and authorized to do business in a particular state.

What is the Meaning of ADVERSE SELECTION In Insurance Terms?

The tendency of those exposed to a higher risk to seek more insurance coverage than those at a lower risk. Insurers react either by charging higher premiums or not insuring at all, as in the case of floods. (Flood insurance is provided by the federal government but sold mostly through the private market.) In the case of natural disasters, such as earthquakes, adverse selection concentrates risk instead of spreading it. Insurance works best when risk is shared among large numbers of policyholders.

What is the Meaning of AFFINITY SALES In Insurance Terms?

Selling insurance through groups such as professional and business associations.

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