{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Assignment 3 - business are their difficulty to get out of...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
In his article, Warren Buffet describes derivatives as ticking time bombs because of the risks involved in them. A derivative is a financial security whose value is “derived” in part from the value and characteristics of another security, the underlying asset. A few of the risks he lists in this
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: business are their difficulty to get out of, their sometimes extremely overstated earnings, and their requirement for collateral if a company has a credit downgrade. Buffet believes derivatives are very dangerous and so far there are no effective ways for banks or governments to control them....
View Full Document

{[ snackBarMessage ]}