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Structured product
This is a customised product designed a bank to meet its clients' need. It is a combination of complex options, swaps... often based on non-quoted parameters. For example, an Investment yielding 5% per year plus 1/10 th of the rise of the Eurostoxx 50 index if any. As it cannot be found in any listed Market, its price is determined using a mathematical model, i.e. a process that modelises the behaviour of the product with time and considering different Market evolution.Margins for this kind of products are generally high for banks who create them.
Structured product
This is a customised product designed a bank to meet its clients' need. It is a combination of complex options, swaps... often based on non-quoted parameters. For example, an Investment yielding 5% per year plus 1/10 th of the rise of the Eurostoxx 50 index if any. As it cannot be found in any listed Market, its price is determined using a mathematical model, i.e. a process that modelises the behaviour of the product with time and considering different Market evolution.Margins for this kind of products are generally high for banks who create them.
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