Market Consistency and WMC [21]

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Bullet points include: Two main approaches, which are mathematically equivalent but present the results somewhat differently: Use so-called deflators. Each simulation has a specified deflator that needs to be applied to it to calculate present values. This approach can be potentially easier to integrate with real-world outputs, if you want your ESG engine to be able to do both simultaneously. Avoid deflators and discount future cash flows across all simulations at the same risk-neutral yield curve. More aligned with how derivative pricing is typically done elsewhere in the financial world

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