Asked by Victoria Archie on May 16, 2024
Verified
Financial engineering
A) is the custom designing of securities or portfolios with desired patterns of exposure to the price of the underlying security.
B) primarily takes place for the institutional investor.
C) primarily takes places for the individual investor.
D) is the custom designing of securities or portfolios with desired patterns of exposure to the price of the underlying security and primarily takes place for the institutional investor.
E) is the custom designing of securities or portfolios with desired patterns of exposure to the price of the underlying security and primarily takes places for the individual investor.
Financial Engineering
Creating and designing securities with custom-tailored characteristics.
Securities
Securities are financial instruments that represent an ownership position in a publicly-traded corporation (stock), a creditor relationship with a governmental body or a corporation (bond), or rights to ownership as represented by an option.
Portfolios
A portfolio containing various types of financial investments, including stocks, bonds, commodities, cash, cash equivalents, mutual funds, and ETFs.
- Grasp the basics of financial engineering and its application in designing securities.
Verified Answer
MF
Marcus FielderMay 22, 2024
Final Answer :
D
Explanation :
Financial engineering involves the custom designing of securities or portfolios to achieve specific exposure to underlying security prices, and it is primarily aimed at institutional investors due to the complexity and scale of transactions involved.
Learning Objectives
- Grasp the basics of financial engineering and its application in designing securities.