How do various derivative instruments used to manage systemic or market risk?  

Derivatives are financial instruments whose value is derived from an underlying asset, index, or rate. They are widely used in international business finance to manage systemic or market risk. Various derivative instruments, such as forwards, futures, options, and swaps, each play a unique role in risk management.

1. Forward Contracts: Forward contracts are customized agreements between two parties to buy or sell an asset at a predetermined price on a specified future date. They are often used to ________ _________ _____ ____ ____ __________ _________ _________ _____ _____.
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