19 Feb '12, 1pm

I have advised people NEVER to invest in any structured product issued by any bank. Here is another reason for my...

My friend invested $40,000 in the Vitamin account issued by a local bank in October 2005. He received a payout of 4% at the end of 1 year but there was no payout for the next five years. On maturity, he received back only his principal. The total payout was 4% for 6 years or only 0.7% per year. According to this structured product, the payout in subsequent years is calculated on the following formula: Potential payout rate = the average of the annual returns of all 18 shares for each potential payout date where the annual return in relation to each share for each of the potential payout dates is (a) 4%, if that share is one of the 15 best performing shares or (b) individual stock return I am an actuary, and I do not understand the logic of this type of formula. I can figure out the calculation but NOT THE LOGIC. It seemed that the creator of this product is allowed to writ...

Full article: http://tankinlian.blogspot.com/2012/02/vitamin-account-6-...

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