Flashcards in gold Deck (16)
strucutre of investment
100% limited recourse loan
5.95% p.a. interest cost payable upfront covering the 3 years
Risk management fee
0.70% p.a. risk management fee payable upfront covering the 3 years
2.2% application Fee (waived for retail investors)
total uprfront cost
Total upfront cost = 22.15%
Volatility Target mechanism
frequency of observation
Observation Frequency is on a monthly closing basis
No margin calls
At Maturity the investor receives
Max of either the Strategy Value performance at Maturity or the Max Locked Level, applied to the 100% leveraged investment Amount subject to changes in the AUD/USD exchange rate less a 10% Performance Fee.
define structred product
A structured product is a financially engineered investment product designed to provide investors with exposure to underlying assets. In this case you gain exposure to gold
An option contract is a type of derivative investment that gives you the right but not the obligation to make a trade in an underlying investment at a specified date.
what is an otc
An OTC option, is an aption that is traded off-exchange, as opposed to a listed stock option. OTC options provide the advantage of complete customisation of the terms.
what does strategy value mean?
The initial strategy value is the exposure amount in this case $1.00 per unit.
what is the participation rate
The participation rate is the percentage of your exposure amount that is currently in the market. Participation rate can vary from 0% to 100% due to the target volatility mechanism