Relative value and Standby letter of credit: Difference between pages

Revision as of 18:48, 11 November 2016

(SLOC).

A type of letter of credit:

Issued to ensure the financial performance of a bank’s customer to a third party beneficiary; and
Drawn upon only in the event of non-performance.

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-(RV).
+(SLOC).
-Relative value is the price of an investment product relative to the price of another closely related comparable investment product.
+A type of letter of credit:
+*Issued to ensure the financial performance of a bank’s customer to a third party beneficiary; and
+*Drawn upon only in the event of non-performance.
-For example, looking at the relative value opportunity (for an investor) of two issuers in the same sector, based on models and analyses, they may appear to be fully comparable, but one is priced lower than the other.
-All other things being equal, the lower priced issuer will therefore have a better relative value from the perspective of a potential investor.
-If a relative price increases, it shows that demand exceeds supply, whereas if a relative price decreases, it indicates the opposite.
 == See also ==
-* [[Absolute]]
+* [[Advance payment guarantee]]
-* [[Default]]
+* [[Contingent liabilities]]
-* [[Demand]]
+* [[Letter of credit]]
-* [[Issuer]]
+* [[Off balance sheet risk]]
-* [[Model]]
-* [[Relative ]]
-* [[Supply]]
-[[Category:The_business_context]]
+[[Category:Long_term_funding]]
-[[Category:Investment]]
+[[Category:Manage_risks]]
-[[Category:Financial_products_and_markets]]
+[[Category:Risk_frameworks]]
+[[Category:Trade_finance]]