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Derivatives




Contingent Exchange Option


An exchange option whereby one asset is exchanged for another when the former underperforms in relation to the latter by a pre-determined amount and simultaneously falls below a designated hurdle level. This option hedges investors against downside movements in asset price (or portfolio value), or unfavorable performance both in absolute and relative terms.



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Derivatives have increasingly become very important tools in finance over the last three decades. Many different types of derivatives are now traded actively on ...
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