1. Is an instrument where price depends upon another product. -
2. Must have a counter-party.
3. Allow business to plan around costs and revenues.
4. Can create more or less volatility.
5. Problems have been created because of leverage, creating financial weapons of mass destruction.but tail can wag the dog.
6. Transparency and complexity
7. There is a lot of hostility against Wall Street and deservedly so. But we want to make sure that the new regulations actually do something today and not shut down legitimate ways to mitigate risk.
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