1.21.7.2 Spot Interest Rate Code
(Required) <Enter a short description here.>
In the Spot Interest Rate Code Method, the discount factor depends on the term of the Cash Flow, but does not vary with interest rate scenario.
Interest Rate Code = Treasury Yield Curve
The formula for the Market Value of the account, for any rate scenario, is:
Market Value = Cash Flow1/ (1 + 1 Year Treasury) + Cash Flow2/ ((1 + 2 Year Treasury)^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 valÂues for 1 Year Treasury and 2 Year Treasury reflect the values from the Historical Interest Rate Data, beginning with the As_of_Date.