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   Structured Financial Transaction
   















 

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Structured Financial Transaction

(1) A security backed by financial assets such as loans or lower quality bonds or notes. The security may trade on a limited basis or be the subject of a public offering. See Securitization. (2) A combination of a conventional security and an embedded derivative. See also Hybrid Security. (3) A packaged guaranteed series of payments issued by an insurance company in settlement of litigation, an insurance closing or a long-term lottery payout. The nominal value of the settlement is usually much greater than the present value of the scheduled payments. Also called Structured Settlement.

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