Structured Products
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Structured product risks
1. Market Risk：
Structured notes are typically tied to the performance of underlying assets such as stocks, ETFs, stock indexes or commodities. If these assets perform below expectations or negatively, structured notes may produce lower returns or even result in a loss of principal.
2. credit risk：
Investors need to understand the credit standing of the issuer. If the issuer (in this case, Golden Horse Capital) faces financial difficulties or defaults, investors may lose their investment principal regardless of the performance of the underlying assets.
3. Liquidity Risk：
Structured notes may be less liquid than other investments, which may make it difficult to sell the notes prior to maturity if an early cash redemption is required.
4. Interest Rate Risk：
For products like capped floating rates, which are usually linked to interest rates, interest rate fluctuations can significantly affect returns. If interest rates move unfavorably, it may result in reduced returns for investors.
5. Complexity Risk：
Structured notes can be complex financial instruments with payoffs tied to various conditions and structures (e.g., fixed coupon notes, snowball coupon notes, digital coupon notes). It is critical to accurately understand the exact terms, conditions, and payoff structure, as misunderstanding these can lead to unintended consequences.
6. Early redemption risk：
Certain structured notes may have an early redemption feature that may be triggered by the issuer or due to the performance of the underlying assets. This may result in the investment being withdrawn earlier than expected and at a time that may be less favorable to the investor.
7. Coupon Payment Risk：
Certain structured notes may have an early redemption feature that may be triggered by the issuer or due to the performance of the underlying assets. This may result in the investment being withdrawn earlier than expected and at a time that may be less favorable to the investor.
8. Upper and lower risk：
For products such as capped floating rate (CFF), although the minimum return rate is guaranteed by the floor rate, the upside potential is limited by the cap rate. Even if the underlying asset performs exceptionally well, investors will not receive more than the cap.
9. opportunity cost：
Investing in structured notes means locking up capital that would otherwise be used for other investment opportunities, which may result in higher returns.
10. Regulatory and tax risks：
Changes in regulations or tax laws could affect the after-tax returns on structured notes. Investors must consider the impact of such changes.
11. Foreign exchange risk：
If the structured notes are linked to an underlying asset in a different currency, investors may be exposed to risks due to fluctuations in foreign exchange rates.
12. Inflation risk：
Fixed returns may not keep pace with inflation, and the purchasing power of returns may decrease over time.