All work must be original and use 2 academic journals for in text citations. No pagiarism.

Write a 2–page paper in which you analyze the role and purpose of the different options, swaps, future and forward contracts. You are required to use at least two journalarticles and follow proper APA format.

Answer preview

Derivatives are securities with a value that depends on an underlying asset or portfolio. Derivatives come in many forms such as options, swaps, futures, and forward contracts with each of them having different roles and purpose. In most cases, derivatives are used to hedge risks for the companies applying them. Therefore, whenever the price of the underlying asset that affects each of the derivatives changes, then, each of the derivatives changes along with it (Pan & Zhou, 2017). In a commercial application, options best relate with futures just that they differ in implementation and functioning while swaps compare with forward contracts except for their period of maturity and time for exchange…

(600 words)