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BMGT444 Final Exam 2025 Questions and Answers Lecture 1 - ....ANSWER ...-Start Derivative - ....ANSWER ...-- an instrument whose value depends on, or is derived from, the value of another (underlying) asset Why Derivatives are Important? - ....ANSWER ...-1. Derivatives transfer risk from one party to another 2. Embedded derivatives are part of many financial instruments 3. Real options help assess uncertain investments Forward Contracts - ....ANSWER ...-- an agreement to buy or sell some asset to another party at some point in the future for a fixed amount Futures Contracts - ....ANSWER ...-- an agreement to buy or sell an asset for a certain price at a certain time in the future Difference Between Forwards and Futures - ....ANSWER ...-- Futures contract is traded on an exchange - Futures require margin requirements and are marked-to-market - Futures are standardized - Futures are more liquid and easier to resell …FOR STUDENTS ONLY…©️2025 ALL RIGHTS RESERVED… 1