Exercise
Answer the following questions
- 1. True or false. Structured products are often highly confusing and difficult for the average retail investor to understand.
- 2. True or false. Because of their principal protection feature, structured products are suitable for investors who may need their funds in the near future (e.g., to buy a house).
- 3. A _____ is a long-term note that tracks the performance of an index and offers principal protection.
- 4. Which of the following is not true about structured notes with principal protection?
- A. The amount of principal protection varies widely among structured products.
- B. They usually track an index, so if the index returns 30%, the structured note is likely to return 30%.
- C. Structured notes are unsecured debt, so the principal protection is only as good the creditworthiness of the issuer.
- D. For investors who wish to trade their structured notes, there may be no secondary market.
Answers
- 1. True. Because struct