Project CEMAPRE internal
| Title | Design risk and Structured Products |
| Participants | Raquel Gaspar (Principal Investigator), Thorsten Schmidt, João B Sousa |
| Summary | "Building upon the foundation laid by last year's internal project on ""Design Risk and Auto-calls,"" this year's focus extends beyond Auto-callable structures to encompass a broader spectrum of structured products and investment strategies. Design risk may arise from the uncertainties and complexities inherent in creating and implementing these financial instruments and strategies. The successful design of structured products demands a profound understanding of financial markets, risk management, and product structuring techniques. Poorly designed products may expose investors to unexpected risks or fail to deliver the intended outcomes. Financial institutions and product designers must diligently assess and manage design risk to ensure that structured products align with investor expectations and perform as intended across diverse market conditions. Despite its evident relevance, isolating and measuring design risk poses a significant challenge. In this project, our primary objective is to make strides in this direction. We aim to develop methodologies that enhance the ability to isolate and quantify design risk, providing valuable insights for effective risk management in the realm of structured products." |