Example of How to Validate a Straight Term Transfer Rate Using the Mid Period Repricing Option (Doc ID 1583836.1)

Last updated on SEPTEMBER 18, 2024

Applies to:

Goal

The following is an example of how to calculate the Transfer Rate when the "Mid Period" option is selected for the Straight Term Transfer Pricing method in Oracle Financial Services Funds Transfer Pricing (FTP).

Normally, FTP calculates the Straight Term Transfer Rate for an Adjustable Rate record by getting the rate from the Interest Rate curve associated with the "Last Reprice Date".  However, this method can mis-state the Transfer Rate in periods where rates change substantially.  If the "Mid Period" option is selected, FTP calculates a Transfer Rate for each Repricing Period that exists in the month for which the Transfer Rate is calculated and generates a weighted average to output to the TRANSFER_RATE column.

Solution

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