M Glossary
This glossary lists the popular terminologies from the current document.
Table M-1 Glossary of Terms
| Term | Description |
|---|---|
| Absolute Payment Pattern | A type of payment pattern commonly used for instruments that are on a seasonal schedule, such as agricultural or construction loans, and require special payment handling based on months or seasons. |
| Absolute Repricing Pattern |
A type of repricing pattern commonly used for instruments with date dependent repricing characteristics. See also: User-Defined Repricing Patterns |
| Account Table | Stores a detailed set of transaction-level data attributes of instruments. For example, origination date, outstanding balance, contracted rate, and maturity date. An account table is also known as an instrument table. |
| Assignment Date | Indicates the relevant date for which the associated yield curve has to be referenced. This parameter is used for defining the Spread from Interest Rate Code and Redemption Curve transfer pricing methods. You can choose the origination date, last repricing date, or the last day of the associated calendar period as the assignment date. |
| Assumptions | A set of values or methodologies that apply to dimension values. |
| Attributed Dimension | A dimension whose members can have other properties or qualifiers known as dimension attributes. |
| Calculation Mode | Any of the two ways, standard or remaining term, of calculating transfer rates and options costs supported by Oracle Funds Transfer Pricing. |
| Cash Flow Edits | A process that allows you to verify and correct your Instrument table data. |
| Cash Flow Edit Logic | A set of checks that are performed in a specified order on the Instrument table data during a Cash Flow Edits Process run. |
| Cash Flow Transfer Pricing Methods | Methods that generate transfer rates based on the cash flow characteristics of the instruments. These methods are used for instruments that Amortize over time. |
| Charge/credit Accrual Basis | The basis on which charge/credit accrues for a business unit and the offsetting treasury unit, similar to the accrual basis used in the calculation of interest. |
| Data Set | A dimension is used for segregating data into different sets according to its use or its source, for example, to separate actuals data, budget data, and encumbrances data. Other uses include separating test data from production data and creating separate data sets for what-if analysis. |
| Dimension | A structure that can be used to categorize business data. A dimension contains members. A dimension can be hierarchical in that you can organize the members into one or more hierarchies, or non-hierarchical. |
| Dimension Attribute | A property or qualifier that further describes a dimension member. An attribute can be anything such As-of-Date, a number, or a character string. For example, the Geography dimension can have an attribute Population that designates how many people live in that area. Each member of the Geography dimension therefore has an associated population. |
| Dimension Based Rule | A business rule whose definition varies depending on the dimensional values of the data to which it is applied. |
| Dimension Identifier | A numeric string that uniquely identifies each member of a dimension. Dimension identifiers are non-translatable, as they are the same regardless of the language context. Each dimension has its own unique set of columns in the Analytical Applications Infrastructure staging tables that serve as the dimension identifier for that dimension. |
| Dimension Member | The values are used to populate dimension columns in the account, transaction, or statistical tables. Such values represent the individual organization units, distribution channels, products, and so on of which each dimension is comprised. In a hierarchy, both the lowest level and node level values are considered to be dimension members. |
| Driver | A variable that influences the prepayment behavior of an instrument. You can build a custom prepayment model using up to three prepayment drivers. Each driver maps to an attribute of the underlying transaction (age or term, or rate) so the cash flow engine can apply a different prepayment rate based on the specific characteristics of the record. |
| Entered Currency |
The currency in which business transactions take place. Entered currency might be different from functional Currency. See also: Functional currency |
| Fact Table | A table that contains data uniquely differentiated by dimension columns. |
| Filter | A business object that filters the source data that is used as input to a process. |
| Functional Currency | The currency in which an organization keeps its books of accounts. Functional currency is associated with a particular ledger. |
| Hierarchy | A structure of dimension members organized by parent-child relationships. |
| Historical Term | The period preceding the assignment date over which the average of daily interest rates from a yield curve is taken. This parameter is used in the Moving Averages transfer pricing method. |
| Hierarchy | A structure of dimension members organized by parent-child relationships. |
| Historical Term | The period preceding the assignment date over which the average of daily interest rates from a yield curve is taken. This parameter is used in the Moving Averages transfer pricing method. |
| Interest Rate Codes | Allows you to define and manage historical interest rates and term structure parameters for various interest rate curves. |
| Interpolation Method | A prepayment rates lookup method. The interpolation method is used when the value of the prepayment driver does not fall on the nodes defined for it. This method assumes that prepayment speeds change on a straight-line basis between the two nodes and calculates accordingly. |
| Lag Term | Indicates that the interest rate must be referenced from a yield curve for a date earlier than the assignment date. The lag term is applicable to the Spread from Interest Rate Code transfer pricing method. |
| Leaf | A node, in a hierarchy, that has no children. All dimension members are nodes, but not all nodes are the lowest level dimension numbers. This is the dimension member that is mapped to the instrument data. |
| Ledger Migration | The process for generating charges or credits, for funds provided or used, for migration to the Management Ledger table based on the transfer rates, adjustments, or option costs, obtained from transfer pricing and option cost calculations or propagation processing. |
| Level | A property of hierarchical dimensions that designates a category of like members. For example, in the Geography dimension, there might be a level named City and a level named State. Geography members such as Tulsa and Dallas belong at the City level, while Geography members such as Texas and Oklahoma belong at the State level. The designation of the level is the same across all hierarchies within a dimension. In other words, Texas is always a state in all Geography hierarchies. |
| Lookup Method | The method used to calculate prepayment rates for prepayment driver values that do not fall on the nodes defined for that particular prepayment driver. |
| Low Discrepancy Sequences | Sequences, also known as quasirandom sequences, are designed to fill the space uniformly. These achieve better accuracy with fewer scenarios than pseudorandom sequences when applied to numerical problems, integration in high dimension, and so on. |
| Management Ledger Table | FSI_D_MANAGEMENT_LEDGER, the most central fact table in the OFS Analytical Applications Infrastructure. It contains a ledger and some statistical data and highly aggregated information, such as cash and other assets, and equity. This table supports Oracle Financial Services analytical applications. |
| Mid-period Repricing Option | Allows you to take into account the impact of high market rate volatility while generating transfer prices for your products. However, the mid-period repricing option applies only to adjustable-rate instruments and is available only for certain non-cash flow transfer pricing methods. |
| Node | A dimension value is located anywhere in a hierarchy. |
| Node Level Assumption |
An assumption is assigned to a dimension value at a level higher than a leaf level. A node-level assumption is associated with a business rule that uses a hierarchical dimension. See also: Product dimension |
| Non-cash Flow Transfer Pricing Methods | Transfer pricing methods that do not require the calculation of cash flows. While some of the noncash flow methods are available only with the Account tables data source, some are available with both the Account and Ledger table data sources. |
| Option Cost | The cost of optionality in terms of a spread over the transfer rate. Consider a mortgage that can be prepaid by the borrower at any time without penalty. Here the lender has granted the borrower an option to buy back the mortgage on par, even if interest rates have fallen in value. Thus, this option has a cost to the lender. |
| Payment Event | A set of payment characteristics, which define the timeline and amount of a specific payment in a payment pattern. |
| Payment Pattern | A user-defined custom amortization pattern. Payment patterns allow the cash flow engine to correctly generate cash flows for instrument records that amortize in a nonstandard way. Payment Patterns are linked to instrument records through user-defined amortization type codes. |
| Preparation | The phase in which the transfer pricing engine gathers information and prepares data structures for the run. This phase is only executed once per engine run. |
| Prepayment Methodologies | A set of methods used to model the prepayment behavior of amortizing instruments and quantify the associated prepayment risk. |
| Prepayment Risk | The possibility that borrowers might choose to repay part or all of their loan obligations before the scheduled due dates. Prepayments can be made by either accelerating principal payments, also known as curtailment, or refinancing. |
| Prepayment Rule | A business rule is used to manage the association of prepayment methodologies and rates to various product-currency combinations. |
| Process Data | Data required to produce results. |
| Processing Table | Instrument table available for, or included in, a Transfer Pricing Process rule run. |
| Product Dimension | A Product dimension on which Oracle Funds Transfer Pricing product level assumptions are based. The Product dimension should be populated with your product chart of account at a level of detail appropriate for assigning transfer pricing assumptions to your data. |
| Propagation Pattern | Allows you to specify parameters, such as source tables, used in the propagation of transfer rates and option costs, for any applicable instrument table from a prior period. |
| Propagation Process | The process for copying historical results, either transfer rates or option costs, or both, that were generated by the application in a previous run for a prior period, to the current period records. |
| Rate Conversion | A process, involving the use of conversion formula, for transforming interest rates from their starting format into a format proper for their use in any given process. |
| Random Number Generation Method | Method to determine how the Monte Carlo process selects random numbers. The random number generation method has two variations, low discrepancy, and pseudorandom sequences. |
| Range Method | A prepayment rates lookup method. Under this method, the prepayment rates are determined by calculating a range of values on an axis. This method assumes that the prepayment speed remains the same for the entire range. |
| Rate Lookup | The procedure for deriving a transfer rate for the appropriate date-term combination from a particular yield curve. |
| Rate Spread | The fixed positive or negative spread from an Interest Rate Code or Note Rate is used to generate transfer rates in the Spread from Interest Rate and Spread from Note Rate methods. |
| Reference Currency | Currency in which the instrument data is expressed and designated by the currency code on the record. Within the application, the reference currency must be selected to indicate assumptions that will be applied to corresponding currency designations contained in the account data. The reference currency is also the currency with which an Interest Rate Code is associated. When you create an Interest Rate Code, you select the reference currency. |
| Relative Payment Pattern |
A type of payment pattern commonly used for modeling instruments with irregular payment frequencies or for instruments where the payment type changes over time. See also: payment pattern |
| Relative Repricing Pattern |
A type of repricing pattern comprising a series of repricing events driven by user-defined timelines. A relative repricing pattern is used for instruments where the repricing is determined by the elapsed time since origination. See also: repricing pattern |
| Remaining Term Calculation Mode | Allows you to calculate transfer rates and option costs for instrument records based on the remaining term of the instrument from the calendar period end date of the data, rather than the origination date or last repricing date of the instruments. This mode is one of the two calculation modes supported by Oracle Funds Transfer Pricing. |
| Repricing Pattern | A user-defined custom repricing pattern. Repricing patterns allow the cash flow engine to correctly generate interest for instrument records that reprice in a nonstandard way. Repricing patterns are linked to instrument records through user-defined adjustable type codes. |
| Rule | A grouping of assumptions, also known as a business rule. |
| Rule of 78 | An approach used by banks to formulate a loan amortization schedule. Also known as The Rule of the Sum of the Digits, this method of computing unearned interest is used on installment loans with add-on interest. The number 78 is based on the sum of the digits from 1 to 12. This approach causes a borrower to pay more interest at the beginning of the loan when there is more money owed and less interest as the obligation is reduced. |
| Simple Dimension | A dimension that does not have hierarchies or attributes. A simple dimension is just a list of members. |
| Smoothing Method | The method used to interpolate rates on the valuation curve for terms that fall between given points. Also, known as the Interpolation Method. |
| Split Payment Pattern |
A split pattern contains multiple sets of payment patterns under a single amortization code. See also: payment pattern |
| Spread | The difference between the customer rate and the transfer rate or market rate (determined by a reference IRC). |
| Standard Calculation Mode | Allows you to calculate transfer rates for instrument records based on the origination or last repricing date of the instruments. You can also use it to calculate option costs based on the origination date. This mode is one of the two calculation modes supported by Oracle Funds Transfer Pricing. |
| Stochastic Rate Index Rule | A business rule is used to establish a relationship between an Interest Rate Code, a risk-free yield curve, and other Interest Rate Codes. Stochastic Rate Index rules are used to generate forward rates for option cost calculations using stochastic interest rate models. |
| Term Structure Model | Model for governing the generation of forward stochastic rates, discount factors for each scenario, and discrete rates for any maturity used in calculating the option-adjusted spread. |
| Transfer Pricing Methodologies | A set of methods used to generate transfer rates for different types of instruments, including amortizing and non-amortizing instruments. |
| Transfer Pricing Rule | A business rule is used to manage the association of transfer pricing methodologies and certain parameters used in option costing to various product-currency combinations. |
| Transfer Pricing Process | A business rule is used to formulate and execute transfer pricing or option cost processing requests. |
| User-defined Dimension | A dimension that enables additional customization, beyond the standard dimensions provided by OFS Analytical Applications Infrastructure. AAI supports user-defined dimensions containing hierarchies and attributes, as well as user-defined simple dimensions. |
| User-defined Payment Pattern | See: payment pattern |
| User-defined Repricing Pattern | See: repricing pattern |
| Yield Curve Term | The point on the yield curve that the system references to calculate transfer rates. |