Power Reverse Dual Currency Note
A dual currency note (DC) pays coupons in the investor's domestic currency with the notional in the issuer’s domestic currency. A reverse dual currency note (RDC) is a note which pays a foreign interest rate in the investor's domestic currency. A power reverse dual currency note (PRDC Note) or power reverse dual currency bond (PRDC Bond) is an exotic financial structured product where an investor is seeking a better return and a borrower a lower rate by taking advantage of the interest rate differential between two economies. The power component of the name denotes higher initial coupons and the fact that coupons rises as the domestic/foreign exchange rate depreciates. The power feature comes with a higher risk for the investor, which characterizes the product as leveraged carry trade. Cash flows may have a digital cap feature where the rate gets locked once it reaches a certain threshold. Other add-on features include barriers such as knockouts and cancel provision for the issuer. PRDCs are part of the wider Structured Notes Market.
Read more about Power Reverse Dual Currency Note: Market, Payoff and Cashflows, Model, Computation, Hedging, PRDC During Subprime Crisis
Famous quotes containing the words power, reverse, dual, currency and/or note:
“In the theory of gender I began from zero. There is no masculine power or privilege I did not covet. But slowly, step by step, decade by decade, I was forced to acknowledge that even a woman of abnormal will cannot escape her hormonal identity.”
—Camille Paglia (b. 1947)
“They shall beat their swords into plowshares, and their spears into pruninghooks: nation shall not lift up sword against nation, neither shall they learn war any more.”
—Bible: Hebrew Isaiah, 2:4.
The words reappear in Micah 4:3, and the reverse injunction is made in Joel 3:10 (”Beat your plowshares into swords ...”)
“Thee for my recitative,
Thee in the driving storm even as now, the snow, the winter-day
declining,
Thee in thy panoply, thy measur’d dual throbbing and thy beat
convulsive,
Thy black cylindric body, golden brass and silvery steel,”
—Walt Whitman (1819–1892)
“There is no legislation—I care not what it is—tariff, railroads, corporations, or of a general political character, that all equals in importance the putting of our banking and currency system on the sound basis proposed in the National Monetary Commission plan.”
—William Howard Taft (1857–1930)
“My note to you I certainly did not expect to see in print; yet I have not been much shocked by the newspaper comments upon it. Those comments constitute a fair specimen of what has occurred to me through life. I have endured a great deal of ridicule without much malice; and have received a great deal of kindness, not quite free from ridicule. I am used to it.”
—Abraham Lincoln (1809–1865)