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Chapter 2: Risk Consideration of Structured Products - Coggle Diagram
Chapter 2: Risk Consideration
of Structured Products
Market Risk
Foreign exchange
Counterparty Risk
Counterparty
party with whom transactions
are completed
Mitigations
Using publicly traded
derivative products
Putting up collaterals
Payment Netting
Liquidity Risk
Institution
Sufficient cash to meet
cash flow requirements
Investor
Ease of converting
investments to cash
Structural Risk
Leverage
Legal Risk
Uncertainty arising from
bankruptcy or legal proceedings
Early Redemption
Collateral Risk
Risk that value of collateral
may not cover loss
Exposure might not have been
fully collaterised
Value of collateral might have depreciated