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.
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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/