01743cas a2200265 a 4500 AALejournalIMF005006 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451869699 1018-5941 BD-DhAAL BD-DhAAL Ricci, Luca. Is There a Novelty Premium on New Financial Instruments? : The Argentine Experience with GDP-Indexed Warrants / Luca Ricci, Marcos Chamon, Alejo Costa. Washington, D.C. : International Monetary Fund, 2008. 1 online resource (40 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper examines the Argentine experience with GDP-indexed warrants in order to gauge the existence of a novelty premium on new financial instruments. It develops a Monte Carlo pricing exercise to calculate the expected net present value of payments, on the basis of various forecast assumptions. The results show that the residual premium paid by these warrants over standard bonds declined significantly by about 600 basis points between December 2005 and July 2007. This suggests that financial innovation may be associated with premia, which decay reasonably fast. Mode of access: Internet Chamon, Marcos. Costa, Alejo. IMF Working Papers; Working Paper ; No. 2008/109 Full text available on IMF http://elibrary.imf.org/view/journals/001/2008/109/001.2008.issue-109-en.xml IMF e-Library