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In mathematics, the derivative is a fundamental tool that quantifies the sensitivity to change of a function's output with respect to its input. The derivative of a function of a single variable at a chosen input value, when it exists, is the slope of the tangent line to the graph of the function at that point.
In finance, an interest rate derivative (IRD) is a derivative whose payments are determined through calculation techniques where the underlying benchmark product is an interest rate, or set of different interest rates. There are a multitude of different interest rate indices that can be used in this definition.
A derivative's value depends on the performance of the underlier, which can be a commodity (for example, corn or oil), a financial instrument (e.g. a stock or a bond), a price index, a currency, or an interest rate. [2] [3] Derivatives can be used to insure against price movements , increase exposure to price movements for speculation, or get ...
A short-term interest rate (STIR) future is a futures contract that derives its value from the interest rate at maturation. Common short-term interest rate futures are Eurodollar, Euribor, Euroyen, Short Sterling and Euroswiss, which are calculated on LIBOR at settlement, with the exception of Euribor which is based on Euribor and Euroyen which is based on TIBOR.
This quantified notion of moneyness is most importantly used in defining the relative volatility surface: the implied volatility in terms of moneyness, rather than absolute price. The most basic of these measures is simple moneyness , which is the ratio of spot (or forward) to strike, or the reciprocal, depending on convention.
The derivatives in the table above are for when the range of the inverse secant is [,] and when the range of the inverse cosecant is [,]. It is common to additionally define an inverse tangent function with two arguments , arctan ( y , x ) {\textstyle \arctan(y,x)} .
By definition, stock is made from bones and simmered for hours. The slow cooking time allows for the gradual breakdown of cartilage and bone marrow, which creates a thicker, more gelatinous and ...
velocity is the derivative (with respect to time) of an object's displacement (distance from the original position) acceleration is the derivative (with respect to time) of an object's velocity, that is, the second derivative (with respect to time) of an object's position. For example, if an object's position on a line is given by