Quanto
/ˈkwɒntəʊ/noun
A financial derivative whose payoff is based on an underlying asset in one currency but is settled in another at a fixed exchange rate.
Did you know?Quanto derivatives are designed to let investors gain exposure to foreign assets without directly bearing ordinary exchange-rate fluctuations.
Etymological Timeline
Proto-Indo-European
PIE
*kwo-
“Interrogative root meaning “who,” “what,” or “which””
Classical Latin
Latin
quantus
“How great, how much, or of what amount”
Medieval Latin
Latin
quanto
“By how much; to what extent”
Medieval Italian
Italian
quanto
“How much; how great”
Late 20th Century
English
quanto
“A financial derivative settled in a currency different from that of its underlying asset”
Modern English
English
quanto
“A cross-currency derivative structured with a predetermined exchange rate”