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- DictionaryDe·riv·a·tive/dəˈrivədiv/
adjective
- 1. (typically of an artist or work of art) imitative of the work of another person, and usually disapproved of for that reason: "an artist who is not in the slightest bit derivative"
noun
- 1. something that is based on another source: "a derivative of the system was chosen for the Marine Corps’ V-22 tilt rotor aircraft"
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What is a derivative of a function f(x)?
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Learn the various meanings and uses of the word derivative in linguistics, mathematics, chemistry, and finance. See synonyms, examples, etymology, and related phrases of derivative.
The derivative is a fundamental tool of calculus that quantifies the sensitivity of 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. The tangent line is the best linear ...
- Average vs. instantaneous rate of change. Newton, Leibniz, and Usain Bolt. Derivative as a concept. (Opens a modal) Secant lines & average rate of change.
- Secant lines. Slope of a line secant to a curve. Secant line with arbitrary difference. (Opens a modal) Secant line with arbitrary point.
- Derivative definition. Formal definition of the derivative as a limit. Formal and alternate form of the derivative. (Opens a modal) Worked example: Derivative as a limit.
- Estimating derivatives. Practice. Estimate derivatives Get 3 of 4 questions to level up!
- What Is A derivative?
- Understanding Derivatives
- Special Considerations
- Types of Derivatives
- Advantages and Disadvantages of Derivatives
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The term derivative refers to a type of financial contract whose value is dependent on an underlying asset, group of assets, or benchmark. A derivative is set between two or more parties that can trade on an exchange or over-the-counter(OTC). These contracts can be used to trade any number of assets and carry their own risks. Prices for derivatives...
A derivative is a complex type of financial security that is set between two or more parties. Traders use derivatives to access specific markets and trade different assets. Typically, derivatives are considered a form of advanced investing. The most common underlying assets for derivatives are stocks, bonds, commodities, currencies, interest rates,...
Derivatives were originally used to ensure balanced exchange rates for internationally traded goods. International traders needed a system to account for the differing values of national currencies. Assume a European investor has investment accounts that are all denominated in euros (EUR). Let's say they purchase shares of a U.S. company through a ...
Derivatives today are based on a wide variety of transactionsand have many more uses. There are even derivatives based on weather data, such as the amount of rain or the number of sunny days in a region. There are many different types of derivatives that can be used for risk management, speculation, and leveraging a position. The derivatives market...
Advantages
As the above examples illustrate, derivatives can be a useful tool for businesses and investors alike. They provide a way to do the following: 1. Lock in prices 2. Hedge against unfavorable movements in rates 3. Mitigate risks These pluses can often come for a limited cost. Derivatives also can often be purchased on margin, which means traders use borrowed funds to purchase them. This makes them even less expensive.
Disadvantages
Derivatives are difficult to value because they are based on the price of another asset. The risks for OTC derivatives include counterparty risksthat are difficult to predict or value. Most derivatives are also sensitive to the following: 1. Changes in the amount of time to expiration 2. The cost of holding the underlying asset 3. Interest rates These variables make it difficult to perfectly match the value of a derivative with the underlying asset. Because the derivative has no intrinsic val...
Learn what derivatives are, how they work, and why they are used in finance. Find out the advantages and disadvantages of different types of derivatives, such as futures, options, swaps, and forwards.
- Jason Fernando
- 1 min
Sep 7, 2022 · Definition: Derivative Function. Let f be a function. The derivative function, denoted by f ′, is the function whose domain consists of those values of x such that the following limit exists: f ′ (x) = lim h → 0f(x + h) − f(x) h. A function f(x) is said to be differentiable at a if f ′ (a) exists.
Learn how to find the slope or rate of change of a function at a point using the limit definition of the derivative. See examples of derivatives of polynomial, trigonometric and exponential functions.
Learn what a derivative is, how to calculate it using the limit definition, and how to apply the rules of differentiation. Also, find out when a derivative does not exist due to discontinuities, cusps, corners, or vertical tangents.
