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:
“He
moves in a wood of desire,
pale antlers barely stirring
as he hunts. I cannot tell
what power is at work, drenched there
with purpose, knowing nothing.”
—Thom Gunn (b. 1929)
“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)
“One of the reforms to be carried out during the incoming administration is a change in our monetary and banking laws, so as to secure greater elasticity in the forms of currency available for trade and to prevent the limitations of law from operating to increase the embarrassment of a financial panic.”
—William Howard Taft (1857–1930)
“There is a note in the front of the volume saying that no public reading ... may be given without first getting the author’s permission. It ought to be made much more difficult to do than that.”
—Robert Benchley (1889–1945)