What Is A Medium Term Note (MTN)

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THE HANSON GROUP OF COMPANIES
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WHAT IS A MEDIUM TERM NOTE (MTN)
The Medium Term Note (MTN) is a financial
investment product with a specific term to obtain
a profit. It is a hybrid product since it
combines more than one type of financial
instrument, in this case, it combines one fixed
income with another variable income in a single
product, and this union is precisely what gives
it the security of the case and good performance.
On the one hand, the fixed income investment will
ensure the return on capital while the variable
income investment will give you the proposed
profit.
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To put them more in context, a fixed-income
investment product would be something that gives
you a fixed monthly or annual profit, for
example, bonds, promissory notes, obligations,
etc. And a variable income product would be one
where the profit varies each month or year,
examples of these are shares, investment funds,
or SBLC standby letters of credit. To put it
simply, the first pay you the same amount of
profit in a particular period (let's take every
month as an example), and the second pays you the
profit in different amounts, one month may be
more, another less, but The idea is that, in the
long run, putting together all the months, there
is a total positive return on investment.
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A structured note would be a mixed product that
can be tailored according to the investor's
profile, that is, they can be customized. There
may be some riskier than others, but those are
the ones that provide the highest return on
investment. As an investor, you must define
well, together with your advisor of the
institution with which you decide to invest the
elements of the structured note such as the term,
the protection percentage, rate, and special
conditions, ensuring that you need and at the
same time you feel comfortable.
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ADVANTAGES OF MEDIUM TERM NOTE
Transparency A medium-term note (MTN) note is
always displayed transparently. Making clear the
conditions of each one and what elements make it
up, so that the investor always knows exactly
what he is getting into. Protection There is
always a limit or a barrier to protection for the
investor. Some are stronger than others,
depending on the type of structured note that the
investor chooses. Diversification There is a
huge variety of structured notes, which make it
accurate for any type of investor, whether you
are someone looking for high return with high
risk as well as someone looking for something
more conservative. It also allows you to invest
in different scenarios, whether the market is
rising or falling, you can earn both ways if you
want
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Accessibility Before these were exclusive
products for millionaire savings, now, it is more
accessible to the average investor, with lower
minimum amounts and greater flexibility in
transactions. Liquidity You can get out whenever
you want, before the expiration date if you like,
but at the current market price. However, not all
allow this, it depends a lot on the issuing
entity. In the case of the example provided,
Morgan Stanley does allow early exit at any time
at the value of the day (such as the stock or a
mutual fund).
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