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derivatives terminology
By
Vinod Kothari
Constant Proportion Portfolio Insurance CDO: Constant proportion portfolio insurance is a portfolio allocation technique where the portfolio manager maintains a constant proportion, determined by a certain gearing factor or multiple, between risky investments and risk free investments. The investments are constantly monitored to maintain this multiple. When a CDO uses this technique for allocating the investible funds, it is called a CPPI CDO, or for short, CPDO.
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