what is the sequence of events used to test whether there is a LC for these contracts?
For PAA
1) can do so qualitatively, but assuming we have to prove quantitatively:
IF PV(CF) minus RA is -ve then
2) LC (assuming -ve is loss signage) but LC is booked as LRC GMM - LRC PAA?
not understanding how to book a LC.
i) the formulas in this graphic not lining up and
ii) how and why LRC GMM - LRC PAA a LC?
Comments
To calculate the loss component, you always need the GMA estimate of LRC even if you are measuring using the PAA
what is the sequence of events used to test whether there is a LC for these contracts?
For PAA
1) can do so qualitatively, but assuming we have to prove quantitatively:
IF PV(CF) minus RA is -ve then
2) LC (assuming -ve is loss signage) but LC is booked as LRC GMM - LRC PAA?
not understanding how to book a LC.
i) the formulas in this graphic not lining up and
ii) how and why LRC GMM - LRC PAA a LC?