List the various functions of derivative markets.

List the various functions of derivative markets. 

Ans. Functions of derivative markets are as follows: 

(a) It helps in transferring risk from risk averse people to risk loving people. 

(b) It stimulates level of savings and investments. 

(c) It helps in discovery of future as well as current prices. 

(d) It increases volume of trade in the market. 

(e) It catalyzes entrepreneurial ability. 

(f) It increases in number of risk averse people in market