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A structured product is a pre-packaged financial instrument that combines traditional assets, such as bonds, with derivatives to create a customized investment solution. Structured products are designed to meet specific investor needs, such as enhanced returns, capital protection, or exposure to particular assets like commodities, currencies, or indices. They are often used by sophisticated investors and can vary in complexity and risk, depending on the underlying components.
An investor purchases a structured product that guarantees a return of their principal if a specific stock index remains within a set range but offers a higher return if the index rises above that range.
• Combines traditional assets with derivatives to create customized investments.
• Designed to meet specific investor goals, such as enhanced returns or capital protection.
• Often complex and used by sophisticated investors.
Structured products provide customized investment solutions that can offer enhanced returns, capital protection, or targeted exposure to specific assets.
Structured products can be complex, with risks tied to market performance, credit risk, and the derivatives used in their structure.
They combine traditional investments with derivatives, offering tailored risk-return profiles that are not available through standard investments.
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