We reinforce the foundations of our quantitative approach to structuring by considering a large class of rational investors. Again, the Bayesian laws of information processing provide us with simple yet powerful tools . Structuring of investment derivatives is summarized as a manufacturing process . This allows for performance, quality and safety to be built into the product at the level of individual production stages -- just as it is done in the established manufacturing industries .
We present a theory of product design covering a large class of investors. Bayesian laws of information processing provide the logical foundation and lead to a simple structuring tool -- the payoff elasticity equation . Structuring of investment derivatives is summarized as a manufacturing process .
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reinforce the foundations of our quantitative approach to structuring by considering
present a theory of product design covering
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rational investors. Again, the
investors.
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us with simple yet powerful tools
the logical foundation and lead to a simple structuring tool -- the payoff elasticity equation
D
. This allows for performance, quality and safety to be built into the product at the level of individual production stages -- just as it is done in the established manufacturing industries