Derivative Markets Exist in Order To

question 33

Multiple Choice

Derivative markets exist in order to:

• A) allow for the direct cash sale of common shares.
• B) allow for the direct cash sale of corporate bonds.
• C) reduce the risk of exposure to price fluctuations in cash markets.
• D) overcome some of the information problems involved in trades in over-the-counter markets.

---

Definitions:

Impermeable Units

Impermeable units refer to layers of rock or sediment that water cannot easily pass through, significantly affecting the flow of groundwater and the storage of hydrocarbons.

Salt Dome

A type of geological formation where a mass of salt has risen upward through the overlying rock, often creating traps for oil and gas.

Oil Field

An area underlain by one or more reservoirs containing oil that can be extracted, often associated with gas deposits.

Impermeable Reservoir

A geological formation that cannot transmit water or other fluids, often trapping fluids such as oil or natural gas.