I am looking into BRC's, and I keep reading about their relatively high coupon rates which are pre-determined by the issuer. However, I can't seem to find any good resources on HOW they pre-determine the coupon rate.
It seems to be strongly related to the valuation of the down-and-in put option on the underlying asset, as higher volatility or lower strike prices would influence the coupon rate, but I can not seem to figure out how exactly.
Additionally, if my above assumption is correct, am I right in assuming the option premium and coupon rate are related? Again, if so, how are they related?