n NISM Certifications
XXI NISM Series XXI-A
Medium

The primary benefit of using a 'Derivative' for hedging purposes is:

Practice question from NISM XXI A for PMS - Mock Test 3 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    To speculate on future price movements

  2. To transfer risk to another party

    Correct answer

  3. C

    To increase market exposure

  4. D

    To generate guaranteed profits

A full explanation for this question is being written. In the meantime, the correct answer is highlighted above.

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