Discounting [10]

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Bullet points include: (Liability) discount rate derived from price of matching asset Market consistency, marking to market, fair valuation, Solvency II More relevant for: Pricing an immediate market transaction Valuation of assets and accrued liabilities for monitoring solvency and asset adequacy (presumes solvency test relates to cost of transferring assets / liabilities) Some other accounting purposes Equates ‘price’ (amount for which product changes hands between willing buyer and willing seller) with ‘value’ (utility product provides to holder)

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