Glossary

Fair Value

Rational and unbiased estimate of a potential market price. Here used as synonym the Theoretical Value.

Theoretical Value

Price as determined by a quantitative model.

Cash Flow

A payment (in a currency) at a certain time. Cashflows from the past and the future are always undiscounted.

Specification

A specification encapsulates all information of a product that is required to price it and handle all lifecycle events.