5.3.5.3.1.4 Add-On Rate Rule - Use TP Method from Selected TP Rule
The Use TP Method from Selected TP Rule selection allows the user to calculate the Add-On Rate based on any TP Method available in the selected Transfer Pricing Rule.
Figure 5-76 Add-On Rate Rule – Use TP Method (Transfer Pricing Rule Selection)
Users can attach any Transfer Pricing Rule on the Add-On Rate Rule Summary Page separately for each type of Add-On Rate. The TP Methods mapped to product hierarchy members in the TP Rule will be read during the Add-On Rate calculation process and applied during the calculation of the Add-on Rate(s). Outputs will be written to the respective Add-on Rate column, for example, Basis Risk Cost Rate, Liquidity Premium Rate, Pricing Incentive Rate, or Other Add-on Rate.
- Term: The following Term Types are available:
- Standard Term: Add-on rate would be calculated as per the repricing period for adjustable-rate instruments and use the original term (maturity date - origination date) for fixed-rate instruments.
- Original Term: Add-on Rates would be calculated as per the original term like a fixed-rate instrument.
Figure 5-77 Add-On rate Method – Use TP Method (Term Selection)