Embedded derivative: Difference between revisions
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An embedded derivative can modify the cash flows of the host contract because the derivative can be related to an exchange rate, commodity price or some other variable which frequently changes. | An embedded derivative can modify the cash flows of the host contract because the derivative can be related to an exchange rate, commodity price or some other variable which frequently changes. | ||
== See also == | == See also == | ||
* [[Derivative instrument]] | * [[Derivative instrument]] | ||
Revision as of 22:00, 29 April 2016
A component of a hybrid security that is embedded in a non-derivative instrument.
An embedded derivative can modify the cash flows of the host contract because the derivative can be related to an exchange rate, commodity price or some other variable which frequently changes.
