Module I·Article IV·~1 min read
Structured Products
Basic Financial Instruments
Turn this article into a podcast
Pick voices, format, length — AI generates the audio
Structured products
Structured notes — a bond with an embedded derivative (for example, a bond with a coupon depending on an index)
Principal protected notes — guarantee to return at least the principal amount, the rest depends on the asset
Autocallables — a complex bond that may be "called" early if conditions are met
Reverse convertibles — a bond that becomes a company’s share if the price drops below a certain level
Equity-linked notes — a bond whose income is linked to stocks
Credit-linked notes — a bond where the interest/principal depends on a credit event
CLO (Collateralized Loan Obligation) — a package of corporate loans, sliced into tranches for investors
CDO (Collateralized Debt Obligation) — a package of debts (bonds, loans), sliced into tranches (the safer = the lower the yield)
CMO (Collateralized Mortgage Obligation) — a package of mortgages, distributed by risk
MBS (Mortgage-Backed Securities) — a bond backed by a portfolio of mortgage loans
ABS (Asset-Backed Securities) — a bond backed by a pool of assets (loans, leasing, receivables)
§ Act · what next