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:
“I have no hesitation in saying that although the American woman never leaves her domestic sphere and is in some respects very dependent within it, nowhere does she enjoy a higher station. And ... if anyone asks me what I think the chief cause of the extraordinary prosperity and growing power of this nation, I should answer that it is due to the superiority of their women.”
—Alexis de Tocqueville (1805–1859)
“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)
“Both of us felt more anxiety about the South—about the colored people especially—than about anything else sinister in the result. My hope of a sound currency will somehow be realized; civil service reform will be delayed; but the great injury is in the South. There the Amendments will be nullified, disorder will continue, prosperity to both whites and colored people will be pushed off for years.”
—Rutherford Birchard Hayes (1822–1893)
“Alexander Woollcott broadcasts the story of the wife who returned a dog to the Seeing Eye with this note attached: “I am sending the dog back. My husband used to depend on me. Now he is independent, and I never know where he is.””
—For the State of New Jersey, U.S. public relief program (1935-1943)