Derivatives.. Just as a carpenter uses a hammer, nails, screws, a screwdriver, and a saw to build something useful or beautiful, a financial expert uses derivatives to manage risk. And just as it is critically important that a carpenter understand how to use these tools, an investment practitioner must understand how to properly use derivatives. In the case of the carpenter, the result is building something useful; in the case of the financial expert, the result is managing financial risk. Thus, like tools, derivatives serve a valuable purpose but like tools, they must be used carefully.
Posted on: Mon, 29 Sep 2014 02:40:58 +0000
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