PeopleSoft Risk Management 9.1 PeopleBook

Reevaluating Deals

This chapter provides an overview of reevaluating deals, provides the prerequisite tasks, and discusses how to:

Process portfolio reevaluation.
Process security mark-to-market.

Understanding Reevaluating Deals

Market factors create exposures for your PeopleSoft deal transactions. To evaluate the risks associated with these exposures requires the use of complex analytical models to value these deals and obtain analytic sensitivities used to analyze the deals. Risk Management enables you to revalue positions periodically; ensuring you base the portfolio's value on current market rates or the price of the underlying.

Prerequisites

You must define analytic structures and analytic parameters, set up your third party vendor information, define function parameters, and specify file export parameters before you can start revaluing your positions.

Before you reevaluate deals, perform the following tasks:

Create deals.
Analyze and calculate risk.
Group deals and hedges into portfolios.

Common Elements in This Chapter

Function Usage

Select from the following:

Delta: Describes an option premium's sensitivity to changes in the price of the underlying. It is the amount of the underlying necessary to hedge small changes in the option price for small movements in the underlying.

MTM (mark-to-market): Calculates the value of the financial instrument based on the current market price of the underlying.

MTM-A (mark-to-market accounting): Calculates the clean value of the financial instrument based on the current market price of the underlying for accounting purposes. This value does not contain any accrued interest.

Analytics Mode

Limit the analysis by specifying an analytics mode from the available values. Available values are limited by your implementation configuration.

Portfolio

Select the portfolio to process.

Reevaluating Deals Analytics

This section describes how to define the parameters for deal analysis.

Page Used to Define Deal Analytics

Page Name	Definition Name	Navigation	Usage
Deal Analytics	MTM_DEALVAL_PNL	Risk Management, Reevaluate Deals, Deal Analytics, Deal Analytics	Override the analysis results by manually entering values. View a history of values that were created during the lifetime of the deal. See Defining Deal Analytic Functions.
Deal Risk Measures	MTM_DEAL_RSK_SEC	Click the Risk Measures link on the Deal Analytics page.	View the various types risk metrics for the deal.

Page Name

Definition Name

Navigation

Usage

Deal Analytics

MTM_DEALVAL_PNL

Risk Management, Reevaluate Deals, Deal Analytics, Deal Analytics

Override the analysis results by manually entering values. View a history of values that were created during the lifetime of the deal.

See Defining Deal Analytic Functions.

Deal Risk Measures

MTM_DEAL_RSK_SEC

Click the Risk Measures link on the Deal Analytics page.

View the various types risk metrics for the deal.

Processing Portfolio Revaluation

Run the Mark-to-Market Batch Application Engine process (TR_PORT_MTM) on your portfolios to revalue and automatically update their current market value.

Pages Used to Process Portfolio Revaluation

Page Name	Definition Name	Navigation	Usage
Portfolio Revaluation	MTM_RUN_CNTL_PNL	Risk Management, Reevaluate Deals, Portfolio Revaluation, Portfolio Revaluation	Run the Portfolio Revaluation batch process to run analytic calculations on your portfolios and revalue their current market value.