Product performance

Product manufacturers are aware that 100% participation will almost always be preferred by investors, even of that means the returns may be lower than for a structured investment that offers a rate of less than par.

The need for speed

This month we compare two six-year principal-protected products linked to the FTSE 100 index. The first product has 100% gearing with a maximum return of 59%, while the second offers uncapped index-linked returns through its participation rate of 83%. The products were both priced by fixing the issue price at 100%. To find the cap for the first product we set the participation to 100% and solved for the price. To find the gearing for the second product, we just solved for the price allowing the

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact info@risk.net to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to Risk.net? View our subscription options

Most read articles loading...

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here