The Role of Derivatives in Hedging Financial Risks: A Comparative Study

The risk is inherent in all the activities we do in our day-to-day life, and all of us remain concerned about it. We all would like to eliminate it altogether. In most cases, complete elimination of risk is not possible, but certain steps can be taken to mitigate the risk. In our personal life, when we buy an insurance policy against theft in the house or for a vehicle, we are attempting to minimize the potential loss we may incur if some unfortunate event takes place. Each one of us in everyday life faces variety of risks and also manages them with appropriate tools and strategies. Key words :- Activities, Elimination, Insurance, Unfortunate