Some investors are waking up from a stimulus-induced malaise andrealizing they don't exactly know what risk they've assumed.
There's a prime example in buyers of credit-linked notes createdby Banco Espirito Santo SA last year.
Investors who bought the securities agreed to protect againstlosses on a 2 billion euro (US$2.68 billion) pool of commercialloans made by the Portuguese bank, according to marketing documentsreviewed by Bloomberg News. That was under the assumption that theystood to get annual returns in excess of 10 percent.
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