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CAIE notes 2 - Coggle Diagram

- - - - HOW: through exposure to a laddered portfolio of autocallable yield notes
      - (via a swap on a Mercube index)
  - - - NOT: bond yield or credit spreads
- - - - May be called early if the index performs well
  - - - Instead of : Owning one note that can call all call or all break at once
- - - - via index/ swap
      - Coupons are contingent on equity performance AND barrier levels being respected
  - - - Coupons can be skipped AND distributions may be lower OR temporarily 0
- - - - Can be mitigated but not eliminated by standard risk controls and collateralizion practices
- - - - can change and subject to each investor's situation
    - - Effect: Reduces cost basis
        
        so when shares are sold (especially after >1y, deferred portion is expected to be treated as capital gain, not ordinary income (also specific to each situation and investor)