Investopedia explains 'Performance Index Paper - PIP'
PIPs are structured products that can be tailored to meet the specific requirements of a company, although the minimum thresholds are generally quite high.
Performance index paper is one way to hedge currency risk. For example, a large U.S. exporter concerned about a plunge in the value of the euro versus the USD can ask its financial institution to structure a PIP that hedges the downside risk of the euro.
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