Trending Content - Sales and Trading Forum
Career Resources
WSO Free Modeling Series - Now Open Through
October 31, 2026
9 Free Financial Modeling Lessons
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
+Bonus: Get 27 financial modeling templates in swipe file
+Bonus: Get 27 financial modeling templates in swipe file
High Finance Applications
Guaranteed
Get at least one offer GUARANTEED
- 1:1 support
- 92% success rate
- 2,000+ mentor network
- Unlimited Live bootcamps
- AI for resume + LinkedIn
- Networking automation tools
- HireVue simulation tool
- Full course library
- Private Slack community
- 20hrs of mocks
- + much more...
http://www.finra.org/investors/alerts/catastrophe-bonds-and-other-event…
http://www.investopedia.com/terms/d/derivative.asp
Based on what I read so far, most sources say that it can be a derivative but they are too shy to conclusively categorize it. I mean, at the the end of the day, you could perhaps say that it is just a complex type of insurance. And that doesn't really answer my question so if anybody can help, I'll appreciate it.
it is definitely a derivative-- its value is defined by an underlying (in this case, a catastrophe). the fact that it functions as insurance has no bearing on its status as a derivative-- if you think about it options are basically insurance (calls = insurance for a short position, puts = insurance for a long position)
I'd more so consider the risk transfer contract between the sponsor and the SPV as reinsurance or a derivative. Whereas the Cat Bonds issued by the SPV to the public as a high yield floating rate security. In general, there is no contract between the investor and the SPV and there is no security, index, or asset underlying the overall value. I may be over analyzing the structure of it, so I'd be interested to hear someone else's input as well.
Quae quia dolorem doloribus maiores sequi. Inventore quis facere pariatur blanditiis. Amet itaque dolores voluptatem aliquam sint quae non. Ipsum nostrum consequuntur velit distinctio est.
Accusamus dolor explicabo quis in voluptatem. Nemo temporibus natus accusamus numquam delectus voluptas. Molestiae pariatur error aut totam quaerat. Accusamus veniam accusantium maxime molestiae asperiores officia at.
Ut corrupti optio accusamus rerum perspiciatis. Velit odit veniam ducimus autem ullam quam. Doloremque non quaerat rerum magnam. Repellendus molestiae provident quia vitae nemo debitis enim aut. Sed quasi accusamus praesentium corporis ipsum natus ratione. Sed consequuntur vel eveniet consequatur animi est.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...