However, the index had
positive cumulative returns (2.64 % and 63.66 %) during the other two tightening cycles, during which rate increases were fairly steady over time.
If the product's reference asset has
a positive cumulative return on the call date, the product is called and investors receive any accrued coupon payments and the face value of the note.
In general, the product is called if the reference asset has
a positive cumulative return on a call date.
In general, the product is called if the reference asset has
a positive cumulative return on the call date.
Not exact matches
As you can see, the one percentage point increase in interest rates results in a loss for Year 1, but by Year 2 the
cumulative return turns
positive because interest and principal reinvest at higher rates.
Without going into too much detail, the reason for this is that negative numbers have a greater effect on a
cumulative return than
positive years do.
However, some products exercise the autocall if the reference asset's
cumulative return is
positive or not too negative (for example, − 10 per cent).