Finance
Yield-Enhanced Note
January 25, 2022
Derivatives
Changing The Beta of a Portfolio Using Futures
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It stands for yield-enhanced note; a type of mandatory convertible preferred which is typically issued at a zero premium and a preset cap on capital appreciated (upside potential), i.e., limited upside participation. However, this note produces an enhanced yield in comparison with similar notes or bonds. The note will automatically convert into a given number of shares (usually one) after the passage of a preset period of time.

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