# Market valuation method (current exposure method)

- Canonical URL: https://www.gerhardmerk.de/market-valuation-method-current-exposure-method
- Post ID: 594350
- Modified: 2023-07-25T21:01:59+00:00
- Language: en

## Definition

The calculation of the loss that would be incurred today on a contract or set of contracts if a counterparty failed to perform on its obligations. The current replacement cost - which corresponds to the amount at revaluation at market prices if this is positive, otherwise it is zero - is supplemented by a factor to account for any risk exposure during the remaining term to maturity of the contract, the so-called add-on factor. - See risk management. Attention: The financial encyclopedia is protected by copyright and may only be used for private purposes without express consent! University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec. Professor Dr. Eckehard Krah, Dipl.rer.pol. E-mail address: info@ekrah.com https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk https://www.jung-stilling-gesellschaft.de/merk/ https://www.gerhardmerk.de/

## Machine-readable

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