A derivative is an agreement that gets its incentive from the performance of an underlying entity. This underlying entity can be an asset, index, or interest rate. Derivatives are often considered as a difficult topic in finance but it is an important topic and you need to cover it effectively.
To guarantee that you are prepared, check the RBI Grade B Previous Year papers to have an idea of the relative difficulty level you can expect in the current year's test. You need to learn the basics of all finance topics before appearing for a mock test to know where you stand. You can start with practise tests based on specific topics to ensure that your concepts are clear.
When you start giving mocks do not just give them just for the sake of giving. Analyse your results and find out where you went wrong if you wish to improve and avoid the same mistakes.
While preparing for derivatives, make sure you are aware of all the technical terms. If you come across a new term then find out what it means instead of just hearting it. Derivatives is a tricky topic and the questions asked will be such that they confuse you despite the options of answers. Hence, make sure that you know the meaning of new terms which you come across during your preparation.
A forward contract is a non-standardized contract between two parties to purchase or to sell an asset at a predefined future time at a cost settled upon today, making it a kind of derivative instrument.
Futures are trade composed contracts which decide the size, conveyance time and cost of an item. Futures can easily be exchanged in light of the fact that they are standardized by a trade.
A swap is a derivative where two counter parties trade money of one party's monetary instrument for those of the other party's monetary instrument. The advantages being referred to rely upon the sort of money related instruments included.
Apart from knowing the types of derivatives in detail you should also know the regulation, purpose, advantages and disadvantages of derivatives. Do not skip anything and read thoroughly. This will ensure that you cover all concepts in detail and help you score well.
A proper understanding of all financial topics will help you further in the interview round. So make sure you prepare accordingly.