1.21.7.4 Forecast Remaining Term
The Forecast Remaining Term Method uses forecasted Interest Rate Data to determine the discount factor.
Interest Rate Code = Treasury Yield Curve
The formula for the market value of this account is:
Market Value = Cash Flow1/ (1+ 1Year Treasury Rate at the 1 year point in the forecast) + Cash Flow2/ ((1+ 2 Year Treasury Rate at the 2 year point in the forecast)^2)
Cash Flow1 is the Cash Flow at the end of year 1. Cash Flow2 is the cash flow at the end of year 2. The values for 1 Year Treasury and 2 Year Treasury reflect the scenario specific values from the forecast rates - interest rate data. Cash Flow1 is discounted at the 1 year Treasury rate, from the 1 year point of the forecast and Cash Flow2 is discounted at the 2 year Treasury rate, from the 2 year point of the forecast.