Potential Future Exposure and Risk free: Difference between pages

Revision as of 11:20, 27 June 2014

The term risk free refers to theoretical assets on which the risk free rate of return is earned.

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-''Derivatives''
+The term ''risk free'' refers to theoretical assets on which the risk free rate of return is earned.
-(PFE).
-The Potential Future Exposure (PFE) in a derivatives contract is an additional credit risk, over and above the current replacement cost of the contract.
-The PFE represents the additional amount by which the exposure could increase, over the remaining life of the contract, with a given level of confidence.
+== See also ==
+* [[Risk free rate of return]]
-== See also ==
+[[Category:Long_term_funding]]
-* [[Credit risk]]
+[[Category:Corporate_finance]]
-* [[Confidence level]]
+[[Category:Corporate_finance]]
-* [[Counterparty]]
+[[Category:Corporate_finance]]
-* [[Fair value]]
+[[Category:Manage_risks]]
-* [[Replacement cost ]]