Question: What is the definition of "Exotic Rates?" (income)

[jjbradleynyc]

Can anyone help me out with this? I'm meeting a manager who deals with this today (one of my clients) and I'm trying to get a heads-up on it and at least understand it a little prior to my meeting.

Thank you!

[chet everett]

Is this what you mean? Industrial Strip - Hammond, IN

Oh wrong forum...

You are probably talking more like this sort of semi-nightmare: http://www.riskarchive.com/archive04-3/000001b7.htm

Any time the rate is NOT tied to a SINGLE measure it can be called an "exotic" and the market for these is a FRACTION of the regular fixed-income world. That does not mean that no one wants them, just that you really need to have clear what the rates ARE TIED TO and what the expected / projected return is going to be be -- much wider range than traditional fixed income...

[jjbradleynyc]

Originally Posted by chet everett

Is this what you mean? Industrial Strip - Hammond, IN

Oh wrong forum...

You are probably talking more like this sort of semi-nightmare: http://www.riskarchive.com/archive04-3/000001b7.htm

Any time the rate is NOT tied to a SINGLE measure it can be called an "exotic" and the market for these is a FRACTION of the regular fixed-income world. That does not mean that no one wants them, just that you really need to have clear what the rates ARE TIED TO and what the expected / projected return is going to be be -- much wider range than traditional fixed income...

Thanks! That helped out a lot. Appreciate it.