Derivatives: meaning, definitions and examples

This term is often used in mathematics and finance to refer to a concept that is derived from another concept. In language learning, it means words formed from a root word.

• Stock options are common types of financial derivatives.
• The word 'happiness' is a derivative of the word 'happy'.

This phrase is typically used in linguistic contexts, referring to words that have been created based on another word, usually through affixes.

• 'Quickly' is a derived word from 'quick' with the addition of the suffix '-ly'.
• 'Unhappiness' is a derived word from 'happy' and the prefix 'un-' and suffix '-ness'.

This term is used to describe the process and methods used to create new words in a language, including compounding, affixation, and other linguistic processes.

• Understanding word formations can help in expanding one's vocabulary.
• Compounding is one of the common word formations in English, as seen in words like 'toothbrush' and 'notebook'.

A general term for financial products whose value is derived from the value of underlying assets. Typically used in financial and economic contexts.

• The risk associated with derivatives can be significant if not properly managed.
• Derivatives are often used by investors to hedge risk.

A broader term that refers to any type of asset that can be traded, including stocks, bonds, derivatives, etc. Used when discussing a wide range of investment vehicles.

• Stocks, bonds, and options are all considered financial instruments.
• Understanding different financial instruments is crucial for a diversified investment portfolio.

Specifically refers to derivatives used in the financial markets. Emphasizes their role and function in finance and investments.

• Financial derivatives are complex instruments used to manage financial risk.
• Regulation of financial derivatives is a key focus for market stability.

Commonly used in mathematics and finance. In mathematics, it refers to the sensitivity of a function's output with respect to changes in its input. In finance, it refers to a financial instrument whose value depends on the value of another asset.

• Calculating the derivatives of the function will help to understand how it changes.
• Derivatives like options and futures are commonly traded in financial markets.

Typically used in mathematics and physics to describe how a quantity changes over time. It is more intuitive and often used in introductory discussions of derivatives.

• The rate of change of the population gives insight into the growth trends.
• Analyzing the rate of change of the stock price can indicate market trends.

Often used in mathematics, especially in calculus, to indicate a small change in a variable. It can also refer to the mathematical concept or the gear system in vehicles that allows for differences in wheel speed.

• The differential equation was solved using various methods.
• The car's differential allows the wheels to rotate at different speeds, especially when turning.