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Derivatives




Quanto Equity Option


An exotic option that combines the features of a quanto option and an equity option. The payoff of a quanto equity option essentially depends on FX/equity correlation. At maturity (for European-style options), the holder receives the amount by which the market price of a foreign stock exceeds (for a call) or is below (for a put) the strike price denominated in foreign currency.



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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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