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Chapter 12 - Commodities Within an Inves... > 12.7 ANALYSING INVESTMENT STRUCTURES

12.7 ANALYSING INVESTMENT STRUCTURES

The variety of structured products presents the investor with a very wide range of possibilities. Some of the structures we have analysed can be decomposed into their constituent elements but the solutions that are modelled using Monte Carlo techniques can be very difficult to analyse. It is possible, however, to present a relatively simple framework that will allow an investor to analyse any product with which he is faced.
• Is the investor faced by any restrictions as to what type of structure he can execute? (The restrictions may be in relation to leverage or use of derivatives.)
• What is the nature of the investor’s desired cashflow?
• What is the investor’s view on expected market movements? (Their direction, magnitude and timing.)

  

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