How To Fix TE242 - Negative quadratic form on risk hierarchy node &

SAP Error Message - Details

• Message type: E = Error

• Message class: TE - Market Risk Management

• Message number: 242

• Message text: Negative quadratic form on risk hierarchy node &

What causes this issue?

The quadratic form is negative because the correlation matrix on the
corresponding risk-hierarchy node is not positively semi-defined. The
value at risk in this case is calculated from the root of the absolute
amount and the quadratic form.

System Response

The system issues an error message and will not allow you to continue with this transaction until the error is resolved.

How to fix this error?

Error message extract from SAP system. Copyright SAP SE.

Smart SAP Assistant

• What is the cause and solution for SAP error message TE242 - Negative quadratic form on risk hierarchy node & ?

  The SAP error message TE242, which states "Negative quadratic form on risk hierarchy node &," typically occurs in the context of risk management and financial calculations within SAP systems, particularly in the SAP Risk Management module. This error indicates that there is an issue with the risk hierarchy node's configuration or the data associated with it, leading to an invalid mathematical condition.
  Cause:
  
  Data Issues: The data associated with the risk hierarchy node may contain inconsistencies or invalid values that lead to a negative quadratic form. This can happen if the risk parameters are incorrectly defined or if there are missing values.
  Configuration Errors: The risk hierarchy itself may not be properly configured, leading to mathematical inconsistencies when the system attempts to calculate risk metrics.
  Modeling Errors: If the risk model or the underlying assumptions used in the calculations are flawed, it can result in negative values that are not mathematically valid.
  
  Solution:
  
  Check Data Integrity: Review the data associated with the risk hierarchy node. Ensure that all required fields are populated correctly and that there are no negative or invalid values.
  Review Configuration: Examine the configuration of the risk hierarchy. Ensure that all nodes are correctly set up and that the relationships between them are valid.
  Adjust Risk Parameters: If specific risk parameters are causing the issue, consider adjusting them to ensure they are within acceptable ranges.
  Consult Documentation: Refer to SAP documentation or help resources for guidance on configuring risk hierarchies and understanding the mathematical models used.
  Testing: After making changes, test the risk hierarchy calculations to ensure that the error no longer occurs.
  Seek Support: If the issue persists, consider reaching out to SAP support or consulting with an SAP expert who specializes in risk management.
  
  Related Information:
  
  SAP Notes: Check for any relevant SAP Notes that may address this specific error or provide additional troubleshooting steps.
  Risk Management Documentation: Review the official SAP documentation for the Risk Management module to understand best practices for configuring risk hierarchies.
  Community Forums: Engage with SAP community forums or user groups where similar issues may have been discussed, and solutions shared.
  
  By following these steps, you should be able to identify the root cause of the TE242 error and implement a solution to resolve it.