In a commodity market, the prices undergo considerable degree of fluctuations. The reasons for price fluctuations may be crop failure, bad weather and demand-supply imbalances. These fluctuations in turn lead to price risk. This price risk is largely borne by the farmers and industries where agricultural commodities are used as raw materials. If the participants hedge against this price risk, [...]
Here is an essay on ‘Derivatives’ for class 11 and 12. Find paragraphs, long and short essays on ‘Derivatives’ especially written for college and management students. Essay on Derivatives 1. Essay on the Introduction to Derivatives: With the expansion of business opportunities, the business organizations are exposed to high risk. This can be attributed to increased volatility in asset prices [...]
In this article we will discuss about:- 1. Introduction to Black-Scholes Model 2. Assumptions of Black-Scholes Model 3. Advantages 4. Limitations. Introduction to Black-Scholes Model: It is a tool for pricing equity options. Fischer Black, Myron Scholes and Robert Merton were awarded the Nobel Prize in Economics for developing this model in 1973. Prior to its development there was no [...]