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:
“La foi consiste à croire ce que la raison ne croit pas ... Il ne suffit pas qu’une chose soit possible pour la croire. Faith consists in believing when it is beyond the power of reason to believe ... It is not enough that a thing be possible for it to be believed.”
—Voltaire [François Marie Arouet] (1694–1778)
“During the late war [the American Revolution] I had an infallible rule for deciding what [Great Britain] would do on every occasion. It was, to consider what they ought to do, and to take the reverse of that as what they would assuredly do, and I can say with truth that I was never deceived.”
—Thomas Jefferson (1743–1826)
“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)
“Glorious bouquets and storms of applause ... are the trimmings which every artist naturally enjoys. But to move an audience in such a role, to hear in the applause that unmistakable note which breaks through good theatre manners and comes from the heart, is to feel that you have won through to life itself. Such pleasure does not vanish with the fall of the curtain, but becomes part of one’s own life.”
—Dame Alice Markova (b. 1910)