What is derivative in SAP IS-B-RA - Risk Analysis?

SAP Term: derivative

• Component: IS-B-RA

• Component Name: Risk Analysis

• Description: Financial product that is derived from other financial products known as the underlying. The derivative's price depends on how the value of its underlying develops. Examples include options on stocks, and fixed-rate securities.

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• Key Concepts: 
  Derivatives are financial instruments that derive their value from an underlying asset. In the context of SAP IS-B-RA Risk Analysis, derivatives are used to hedge against risks associated with changes in the value of the underlying asset. Derivatives can be used to reduce the risk of losses due to market volatility or other factors.
  
  How to use it: 
  In SAP IS-B-RA Risk Analysis, derivatives can be used to hedge against risks associated with changes in the value of the underlying asset. Derivatives can be used to reduce the risk of losses due to market volatility or other factors. Derivatives can also be used to speculate on future price movements of the underlying asset. 
  
  Tips & Tricks: 
  When using derivatives, it is important to understand the risks associated with them and how they can affect your portfolio. It is also important to understand how derivatives are priced and how they can be used in different market conditions. 
  
  Related Information: 
  For more information on derivatives and how they can be used in SAP IS-B-RA Risk Analysis, please refer to the SAP Help Portal or contact your local SAP representative.