When initially investing in this product all structured annuities require the policyholder to make three choices that are essentially the same as an indexed annuity.
Structured investment products with caps and floors.
An interest rate floor is an agreed upon rate in the lower range of rates associated with a floating rate loan product.
Many of these products pro vide a guaranteed return combined with some participation in the performance of the equity market.
An interest rate cap is a derivative in which the buyer receives payments at the end of each period in which the interest rate exceeds the agreed strike price an example of a cap would be an agreement to receive a payment for each month the libor rate exceeds 2 5.
Structured products often provide the potential to offer higher returns but also carry more significant risks than the traditional mutual fund investment because of the types of underlying.
Interest rate caps floors and collars are option based interest rate risk management products.
Interest rate floors are utilized in derivative.
Structured investments have been part of diversified portfolios in europe and asia for.
They are most frequently taken out for periods of between 2 and 5 years although this can vary considerably.
Structured investment products with caps and floors carole bernard university of waterloo phelim boyle wilfrid laurier university july 2008 insurance mathematics and economics dalian.
These contracts often have complex designs and in particular compli.
Structured investment products with caps and floors abstract structured products are popular with retail investors.
View detailed risk disclosure.
1 the duration of the.
Many years while the basic concept for these products originated in the united states in the 1980s.
Structured products are created by investment banks and often combine two or more assets and sometimes multiple asset classes to create a product that pays out based on the performance of those.
Please also refer.
Carole bernardstructured investment products with caps and floors 1 32.
This is a structured investment product which is not a protected deposit and is not protected by the deposit protection scheme in hong kong.
The price of structured products may move up or down.