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FINANCIAL MARKET COURSES

Structured Products - An Introduction

Over the past two decades or so, investors have been given access to an ever widening universe of potential assets to invest in. The development of structured products (SPs) had allowed investors to take views on different asset classes in a more precise way than merely 'buying' or 'selling' an instrument. This course describes the concept of structured products and examines the development of the market. Investor motivations, the basics of construction, and key risks are all investigated.

  • OBJECTIVES

    On completion of this course, you will be able to:

    Explain the basics of structured products (SPs)

    Describe how the market for SPs has developed

    Outline the lifecycle of a typical structured product

    Understand why investors might use SPs as opposed to other instruments

    Show how a simple SP is constructed and outline the key risks associated with SPs

  • COURSE OUTLINE

    Topic 1: Overview of Structured Products

    Key Characteristics of SPs

    Basis Structures

    o Participation

    o Downside Protection

    o Capped Upside

    Partial/Leveraged Returns

    Combinations

    Investor Uses of Structured Products

    Customization or Commoditization?

    Topic 2: Market Development

    Early Days

    Emergence of Structured Notes/Deposits

    From Institutional to Retail

    More Complex Structures

    Topic 3: Lifecycle of a Structured Product

    Stages

    o Idea

    • Team Sheets

    o Issuance

    o Maturity

    Topic 4: Key Product Considerations for Investors

    Key Considerations

    o Income or Capital?

    o What is being Bought/Sold?

    o Path Dependency

    o Baskets

    o Notes or Deposits?

    Topic 5: Product Construction & Risks

    Product Construction

    o Low Exercise Price Option (LEPO)

    o Option plus Zero-Coupon Bond

    Risks

    o The ‘Greeks’

    o Dynamic Risk Assessment and Other Factors

  • PREREQUISITE KNOWLEDGE

  • ESTIMATED COMPLETED TIME

    75 Minutes

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