What is a 'collar' in finance?

In finance, the term "collar" usually refers to a risk management strategy called a protective collar involving options contracts, and not a part of your shirt. But, using a protective collar could keep you from losing your shirt when then the value of your investments tank.

What is a derivative & how does it work?

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.

What is a total derivative?

The definition of the total derivative subsumes the definition of the derivative in one variable. That is, if f is a real-valued function of a real variable, then the total derivative exists if and only if the usual derivative exists. The Jacobian matrix reduces to a 1×1 matrix whose only entry is the derivative f ′ ( x ).

What is the derivative if x = 1?

At x = 1, the derivative is 6. At x = 2, the derivative is 24. The derivative is clearly not changing at a constant rate with x. Now that we know the power rule, and we saw that in the last video, that the derivative with respect to x, of x to the n, is going to be equal to n times x to the n minus 1 for n not equal 0.