We found a match
Your institution may have access to this item. Find your institution then sign in to continue.
- Title
Embedded options in enhanced certificates of deposit.
- Authors
Cline, Brandon N.; Brooks, Robert
- Abstract
Deregulation and competition have led to the introduction of many new esoteric investment products in the financial service industry. One such product is the enhanced certificate of deposit, which contains embedded interest rate options. These securities are commonly known as flex certificates of deposit. We find that these products are currently being priced in a peculiar manner. A discussion of the logical breakdown of options embedded in the flex certificate of deposit is given. We also consider why banks are willing to give away valuable interest rate options.
- Subjects
CERTIFICATES of deposit; INTEREST rates; BANKING industry; INVESTMENTS; FINANCIAL services industry
- Publication
Financial Services Review, 2004, Vol 13, Issue 1, p19
- ISSN
1057-0810
- Publication type
Article