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Visual Quantitative Finance: A New Look at Option Pricing, Risk Management, and Structured Securities
book

Visual Quantitative Finance: A New Look at Option Pricing, Risk Management, and Structured Securities

by Michael Lovelady
April 2013
Beginner content levelBeginner
336 pages
6h 40m
English
Pearson
Content preview from Visual Quantitative Finance: A New Look at Option Pricing, Risk Management, and Structured Securities

7. Investment Profiles and Synthetic Annuities

Before continuing with the mechanics of model building, it might be helpful to provide some practical context for structured security investing. Chapter 7 is a reprint of Chapter 2 that originally appeared in Profiting with Synthetic Annuities: Option Strategies to Increase Yield and Control Portfolio Risk (Pearson Education, 2012).

Synthetic annuities are a form of structured security that combine options and management rules to customize the risk/return profile of investments. Options are used to create a synthetic risk-smoothing mechanism and annuity-like cash flows. The management rules are designed to mitigate risk and maximize income over the long term.

Because Profiting with Synthetic Annuities ...

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Publisher Resources

ISBN: 9780132929233Purchase book