Derivative Financial Instruments Exist to Lessen, Not Increase, Risk

question 29

True/False

Derivative financial instruments exist to lessen, not increase, risk.

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Definitions:

Negligent Misstatement

A false statement made carelessly rather than with the intent to deceive, leading to someone's loss.

Economic Loss

Financial loss experienced as a result of another’s actions or failure to act, which can include lost profits, repair costs, and decreased value of property.

Defamation

The act of communicating false statements about a person that injure the reputation of that person.

Business Interruption Insurance

An insurance that covers the loss of income a business suffers after a disaster related to closing its premises or the rebuilding process.