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Exotic Derivatives
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A pejorative term used at various times to describe many derivative instruments which contain more than one elementary financial instrument. Instruments which have been tarred with this brush include such basics as Inverse Floaters, Equity-Linked Notes (ELNs), virtually any instrument with a currency adjustment or translation, and practically all interest rate-based structured notes. In some cases, the term references instruments with complex or leveraged payout patterns.
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