Simultaneous equations and Structured finance: Difference between pages

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A set of related equations including two or more variables.
Structured finance can refer to either:
 
*Securitisation; or
 
*Combining straight debt with derivative instruments to create more complex instruments.
'''Example'''
 
y = 3z ''and''
 
z + y = 1
 
 
'''Solution'''
 
If the number of equations is at least as many as the number of variables, the equations can be solved.
 
Rearranging the second equation:
 
z = 1 - y
 
Substituting into the first equation, for z:
 
y = 3 x ( 1 - y )
 
y = 3 - 3y
 
4y = 3
 
y = 0.75
 
 
z = 1 - 0.75
 
= 0.25
 
 
'''''Check'''''
 
y = 3z
 
= 3 x 0.25
 
= 0.75
 
OK.
 
 
z + y
 
= 0.25 + 0.75
 
= 1
 
OK too.




== See also ==
== See also ==
* [[Equation]]
* [[Derivative instrument]]
* [[Financial intermediary]]
* [[Intermediation]]
* [[Non-bank financial intermediaries]]
* [[Securitisation]]
* [[Straight bond]]  = straight debt


[[Category:Financial_management]]
[[Category:Corporate_financial_management]]
[[Category:Knowledge_and_information_management]]

Revision as of 12:00, 2 July 2022

Structured finance can refer to either:

  • Securitisation; or
  • Combining straight debt with derivative instruments to create more complex instruments.


See also