Financial Analyst 1 Interview Questions and Answers for Freshers

Derivatives are financial instruments whose value is derived from an underlying asset or group of assets.

• Derivatives can be used for hedging risk, speculating on price movements, or gaining exposure to assets without owning them.

• Common types of derivatives include options, futures, forwards, and swaps.

• Derivatives can be traded on exchanges or over-the-counter (OTC).

• They are often used by investors, companies, and financial institutions to manage risk or enhance returns.