Australian Stock Price Riskless Indexed Note - ASPIRIN

DEFINITION of 'Australian Stock Price Riskless Indexed Note - ASPIRIN'

A zero-coupon bond with a return linked to the Australian all-ordinaries stock index. The bond has a four-year maturity and is repayable at face value, with a yield derived from the index's percentage increase over a predetermined level.

Also known as an "All-Ordinaries Share Price Riskless Indexed Note".

BREAKING DOWN 'Australian Stock Price Riskless Indexed Note - ASPIRIN'

An aspirin is an alternative investment opportunity to those who wish to capture gains in the stock market, but mitigate the downside risk. The note will pay the investor a return when the stock index performs above a specific percentage, for example, if the hurdle was 10% and the index returned 15%, the aspirin holder would receive a yield of 5%. The downside of the note occurs if the index does not outperform its hurdle. In this case, the investor experiences zero return over a four-year period.

RELATED TERMS
  1. All-Ordinaries Stock Index

    A stock index comprised of common shares from the Australian ...
  2. Kangaroos

    Slang term for Australian stocks, it refers mostly to the stocks ...
  3. Aspirin Count Theory

    A market theory that states stock prices and aspirin production ...
  4. Indexation

    Linking adjustments made to the value of a good, service or other ...
  5. Zero-Coupon Bond

    A debt security that doesn't pay interest (a coupon) but is traded ...
  6. Indexing

    1. The adjustment of the weights of assets in an investment portfolio ...
Related Articles
  1. Options & Futures

    Index Options: A How-To Guide

    Index options, financial derivatives that derive their value from a stock index, can provide stability and peace of mind for less risky investors.
  2. Professionals

    Average Market Returns

    We look at the major indexes and their average yearly returns.
  3. Professionals

    Domestic vs. Global Indexes

    CFA Level 1 - Domestic vs. Global Indexes. Learn the differences between domestic and global indexes. Provides examples of each, including bond and composite indexes.
  4. Investing Basics

    The Pros and Cons of Indexes

    Learn about the advantages and disadvantages of stock indexes and passive index funds. Discover how there is an opportunity cost to using index funds.
  5. Investing Basics

    What is an Index?

    An index is a statistical means of calculating a change in an economy or market.
  6. Bonds & Fixed Income

    How Are Zero-Coupon Municipal Bonds Taxed?

    What every investor needs to know about taxes and zero-coupon muni bonds.
  7. Options & Futures

    20 Investments: Zero-Coupon Securities

    What Is It? A zero-coupon security, or "stripped bond", is basically a regular coupon-paying bond without the coupons. The process of "stripping" or "zeroing" a bond is usually done by a brokerage ...
  8. Options & Futures

    Using Index Futures To Predict The Future

    Want to know whether the stock market will open up or down? Check out the index futures.
  9. Options & Futures

    Principal-Protected Investments: Risks, Fees And Regulations

    Discover if these instruments hit the right note for you.
  10. Bonds & Fixed Income

    How To Evaluate Bond Performance

    Learn about how investors should evaluate bond performance. See how the maturity of a bond can impact its exposure to interest rate risk.
RELATED FAQS
  1. How do I calculate the holding period return yield on a zero-coupon bond?

    Learn how to calculate the holding period return yield for a zero-coupon bond based on a formula with a relevant example ... Read Answer >>
  2. How does an investor make money on a zero coupon bond?

    Learn about investing in zero-coupon bonds, exactly how they work as an investment vehicle, and their advantages and disadvantages ... Read Answer >>
  3. What is the difference between a zero-coupon bond and a regular bond?

    The difference between a zero-coupon bond and a regular bond is that a zero-coupon bond does not pay coupons, or interest ... Read Answer >>
  4. Why do interest rates tend to have an inverse relationship with bond prices?

    At first glance, the inverse relationship between interest rates and bond prices seems somewhat illogical, but upon closer ... Read Answer >>
  5. What bond indexes follow the supply and demand for junk bonds?

    Learn about indexes that track junk bonds, why junk bonds pay more interest than other types of bonds, and how these bond ... Read Answer >>
  6. Is it possible to invest in an index?

    First, let's review the definition of an index. An index is essentially an imaginary portfolio of securities representing ... Read Answer >>
Hot Definitions
  1. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  2. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  3. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
  4. Generally Accepted Accounting Principles - GAAP

    The common set of accounting principles, standards and procedures that companies use to compile their financial statements. ...
  5. DuPont Analysis

    A method of performance measurement that was started by the DuPont Corporation in the 1920s. With this method, assets are ...
  6. Call Option

    An agreement that gives an investor the right (but not the obligation) to buy a stock, bond, commodity, or other instrument ...
Trading Center