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derivative investments

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derivative investments

Investments that rely on the performance of underlying assets in order to establish value and return profits.



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The agency ordered state firms in March to reconsider their derivative investments overseas and back out of high-risk contracts after several Chinese firms reported huge losses.
Earlier this year the state-owned Assets Supervision and Administration Commission ordered state firms to reconsider their overseas derivative investments and leave high-risk contracts after some suffered massive losses.
The banks have been devastated in the fallout from the mid-2007 credit crunch amid fears about their exposure to complex derivative investments backed by weak subprime loans that have gone bad.
 
 
 
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