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  • August 2014 (Revised March 2015)
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Molycorp: Morgan Brothers' Reverse Convertible Notes (C)

By: Benjamin C. Esty and E. Scott Mayfield
  • Format:Print
  • | Language:English
  • | Pages:5
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Abstract

In August 2011, Morgan Brothers Bank was issuing a $2.5 million reverse convertible note with payoffs linked to the price of Molycorp's common stock. These financially engineered securities were just one of many kinds of structured notes available in the retail market. Investors must decide whether the notes were fairly priced and whether they offered a favorable risk-return trade-off.

Keywords

Structured Products; Reverse Convertible Notes; Replication; Option Pricing; Bond Pricing; Financial Engineering; Valuation; Metals and Minerals; Debt Securities; Finance; Investment; Mining Industry; Financial Services Industry; Canada; California

Citation

Esty, Benjamin C., and E. Scott Mayfield. "Molycorp: Morgan Brothers' Reverse Convertible Notes (C)." Harvard Business School Case 215-002, August 2014. (Revised March 2015.)
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About The Authors

Benjamin C. Esty

Finance
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E. Scott Mayfield

Finance
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Related Work

    • August 2014 (Revised March 2015)
    • Faculty Research

    Molycorp: Morgan Brothers' Reverse Convertible Notes (C)

    By: Benjamin C. Esty and E. Scott Mayfield
Related Work
  • Molycorp: Morgan Brothers' Reverse Convertible Notes (C) By: Benjamin C. Esty and E. Scott Mayfield
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