Derivatives Q39

0. Sebastian is planning to invest in derivatives. Which of the following is least likely to be an advantage that he should consider?

  • Option : C
  • Explanation : Derivative markets provide for effective risk management and thus result in payoffs different than those of the underlying. Therefore similar payoffs are least likely to be an advantage to consider. An operational advantage of derivative markets is the ease of going short in comparison to the underlying spot market.
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