Which class of derivatives accounts for the largest dollar share in the world market in terms of notional amount outstanding?
A) Equity derivatives.
B) Interest-rate derivatives.
C) Foreign exchange derivatives.
D) Credit derivatives.

Question

Quizplus · Accepted Answer

Interest-rate derivatives account for the largest dollar share in the world market in terms of notional amount outstanding. As of 2019, the notional value of interest-rate derivatives was $542 trillion, while the notional value of foreign exchange derivatives was $98 trillion, credit derivatives $11.7 trillion, and equity derivatives $9.8 trillion. Interest-rate derivatives are used for hedging against interest rate fluctuations, speculating on interest rate movements, and managing interest rate-related risks.

Which Class of Derivatives Accounts for the Largest Dollar Share