Why Quantitative Structuring?

Abstract

Quality-designed consumer products are easy to recognize. Wouldn't it be great if the quality of financial products became just as apparent?

This paper is addressed to financial practitioners. It provides an informal introduction to Quantitative Structuring -- a technology of manufacturing quality financial products (information derivatives).

The presentation is arranged in three parts: the main text assumes no prior knowledge of the topic; important detailed discussions are arranged as a set of appendices; finally, a list of references provides further details including applications beyond product design: from model risk to economics.

Keywords: Product Design, Information Derivatives, Model Risk, Risk Aversion, Investment Premium, Equity Premium Puzzle

JEL Classification: C00, D83, G00