Examples of Derivatives Users

Users Underlying Risks Derivative Types
Commodity manufacturers Commodity price Commodity derivatives
Multinational companies Funding cost of foreign debt issuance and investments Cross-currency swaps / FX forwards
Life insurers Asset-liability management Interest rate swaps or swaptions
Corporate treasurers Funding cost before debt issuance Forward rate agreements
Construction firms The cost of raw materials Commodity derivatives
Exporters Foreign exchange (FX) fluctuations Cross-currency swaps / FX forwards
Bank or loan portfolio managers Credit risk of bond or loan exposures Credit default swaps
Equity investors Equity prices Equity derivatives
Governments Interest rate risk on new bond issuance Interest rate swaps

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