Defined Conditions Payout Commitment

From Open Risk Manual

Definition

Defined Conditions Payout Commitment. A commitment which is only made when certain defined conditions are met. Further notes: Like all contractual commitments, the details of the commitment (and in this case, the conditions) are defined in the corresponding Contractual Terms. These set out what the commitment is and what the conditions are under which it is to be met. Term introduced in order to support digital and other exotic options. Note this is similar to but distinct from commitments where the specific nature of the commitment (typically a cashflow) is defined by resolving some mathematical formula i.e. where the commitment to do something is not conditional but the precise monetary amounts (payment, settlement) are.


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This entry annotates a FIBO Ontology Class. FIBO is a trademark and the FIBO Ontology is copyright of the EDM Council, released under the MIT Open Source License. There is no guarantee that the content of this page will remain aligned with, or correctly interprets, the concepts covered by the FIBO ontology.

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