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- How do I calculate the return on my investment in a structured product?
How do I calculate the return on my investment in a structured product?
An investor's return on their structured product is determined on the product's expiration date based on following formula:
R = PR × Y + CPL
- R: The return on investment at product maturity
- PR: The participation rate
- Y: The yield of the base asset from the time the product was purchased to product maturity
- CPL: The capital protection level
A participation rate is only used with Classic Products and Capped Products (not Touch Products).
To calculate the net profit, you must deduct 100% of the initial investment from the return.
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More Frequently Asked Questions about Structured products:
- How do I purchase a structured product?
- What is "product maturity"?
- Can I sell my structured product before it reaches maturity?
- How are requests to purchase a structured product processed?
- For what reasons can a request to purchase a structured product be denied?
- What is the "participation rate"?
- How to calculate the return of your investment in a structured product?
- How are a product's "capital protection" and "participation rate" related?
- What is a "boundary"? What is a "cap level"?
- What is "price movement"?
- What is the breakeven point and how is it calculated?
- What is an Interim Coupon?
- What happens if the price of the product first touches the specified level and then drops below the starting price of the base asset?
- If the price of the base asset touches the specified level immediately after the product is purchased, when will the client be able to take their profit?
- What percentage of the profit will the client lose for the early redemption of a structured product?
- What happens if the price doesn’t reach the specified level and the product falls below the starting price of base asset at expiration?