Can anyone help me wrap my head around the example on pg. 366 of reading 30 section 2.3.1? Apparently Kat Puts up no capital to engage in the transaction but how is that the CASE? Since it looks like Kat spends 1.5x face value for the American factories bond while only receiving 1x face value from lifeco for the structured note.
Never mind. Found an explanation elsewhere on the forum