With the do-it-yourself structured note, you don't have to worry that the bank goes bust.
Just the sort of thing a brokerage firm could do to create a structured note like Merrill's.
There are more variations on the structured note theme, most of them complicated and some quite risky.
Welcome to the bizarre world of structured note investing where time-honored traditions of investor protection are routinely flouted.
But at least over six years the holder of this structured note will get the benefit of compounded price returns, right?
So you don't buy a hedge fund, you buy a "structured note, " whose return is tied to an index of hedge funds.
For example, for the 18-mo period ending July 2001the MSCI Emerging Total Return Index was -36.4%, MSCI Emerging Price Index was -38.6%, and the structured note therefore was -28.6%.
In mathematically complicated ways, market interest rates are built into the pricing of derivatives like puts and calls, and with higher rates the terms of a structured note can be made more appealing to the naive investor.
As a small measure of justice, investors have won virtually all of the arbitration cases filed against UBS and have recovered most of their Lehman Structured Product Note losses.
They note that it is not structured to navigate the current political setup.
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Structured products sound appealing at first , but they are inextricably tied to the credit risk of the bank issuing the note.
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