EMBEDDED DERIVATIVES

This topic has 1 reply, 2 voices, and was last updated 3 years ago by Stephen Widberg.

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June 12, 2022 at 5:00 pm #658568
Yovin
Participant
- Topics: 26
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Hi Sir,
I need some notes on embedded derivatives.
I have Google it , but it does not make sense.
June 13, 2022 at 7:13 am #658597
Stephen Widberg
Keymaster
- Topics: 17
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Derivative “hidden” in a ‘host’ contract.

Example:

Bond where redemption value is linked to Stock Market index.

1. Host contract = bond = amortised cost.
2. Hidden derivative – on share prices = fair value.

Don’t worry about numbers. 🙂
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