Define a Hybrid Derivative and Provide an Example.

A hybrid derivative is a financial instrument that combines two or more different types of derivatives or assets into a single product. It typically links the payoff to multiple underlying assets, markets, or factors, such as combining a bond with an embedded option.

An example is a commodity-linked note, where the coupon payment is tied to the price of a commodity while the principal repayment is like a standard bond.

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