Cryptocurrency Q&A
What is the main risk of investing in an ETN?
What is the main risk of investing in an ETN?
LitecoinLodestar
Tue Oct 29 2024
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6 answers
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I want to understand the primary risk associated with investing in an Exchange Traded Note (ETN). What is the main factor that I should be concerned about when considering such an investment?
6 answers
Carlo
Thu Oct 31 2024
The primary risk associated with exchange traded notes (ETNs) revolves around credit risk.
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KatanaSharpened
Thu Oct 31 2024
ETNs are essentially debt instruments where the issuer promises to deliver the return of a specific index to the investor.
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CherryBlossomDance
Thu Oct 31 2024
This agreement creates an obligation for the issuer to repay the investor based on the performance of the tracked index.
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OliviaTaylor
Thu Oct 31 2024
In the event that the issuer defaults on this obligation, the payments promised to the investor can no longer be fulfilled.
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AltcoinAdventurer
Wed Oct 30 2024
Such a default scenario would result in significant losses for the investor as they would no longer receive the anticipated returns from the ETN.
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