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Just to be clear, in the toy example, TSLA-2 does not compete with the original Tesla in anyway. They simply replicate the cash flows. Maybe TSLA-2 sells electr
by dcolkitt 6y ago
Just to be clear, in the toy example, TSLA-2 does not compete with the original Tesla in anyway. They simply replicate the cash flows. Maybe TSLA-2 sells electric cars in a parallel universe. Or more likely maybe, it’s just a creditworthy institution who promises to match the profit stream, i.e. a swap.