JUNO Definitions - D

Derivatives: A derivative is a financial contract, between a seller and a buyer, in which the parties agree to trade an asset at a predetermined date for a set price. The price is derived from the fluctuation in price of one or more underlying assets. Derivatives can be traded over-the-counter (OTC), which allows more customisation to an investor or standardised on an exchange.

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Devaluation: A monetary policy to lower the value of a country’s exchange rate, which is used by countries with fixed exchange rates.

 

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Diversified portfolio: Diversifying is about having a wide variety of investments, which reduces your risk.It’s about not having all your eggs in one basket.

 

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