Economics · Economy
Which of the following is typically considered a major risk or disadvantage, rather than an advantage, of participating in the Derivatives market?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1High leveraging can significantly increase financial risks and losses✓
- 2They enhance liquidity in the market for underlying assets
- 3They represent a form of insurance against price risks (hedging)
- 4They help in the price discovery process and can mitigate portfolio volatility
Correct answer
High leveraging can significantly increase financial risks and losses
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