As the Chapter Points Out, There Have Been Many Cases

question 64

Essay

As the chapter points out, there have been many cases where derivatives have led to a lot of abuse. If this is the case, why do derivatives exist?

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Definitions:

Common Goal

An objective or purpose shared by multiple individuals or groups, aiming to achieve a mutual outcome.

Group

A collection of at least two people who are doing or being something together.

Prisoner's Dilemma

A scenario in game theory where two individuals act in their own interest but could achieve a better outcome through cooperation.

Social Psychologists

Scientists who study how people's thoughts, feelings, and behaviors are influenced by the actual or imagined presence of others.