Explain Two of the Four Main Types of Derivatives Used

question 86

Essay

Explain two of the four main types of derivatives used in the foreign exchange market, and why they are used.

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Definitions:

Balance Sheet Credit Column

Part of the balance sheet that records liabilities, equity, and certain revenues that increase the company's worth or decrease its debts.

Worksheet

An informal business document used internally for planning and preparatory purposes, assisting in the preparation of financial statements or other reports.

Worksheet

A document or tool used by accountants to record and organize financial data, facilitating the preparation of financial statements.

Financial Statements

Formal records of the financial activities and position of a business, including income statement, balance sheet, and cash flow statement.