What is chi in SAP IS-B-RA-MR - Market Risk Analysis?

SAP Term: chi

• Component: IS-B-RA-MR

• Component Name: Market Risk Analysis

• Description: Merit function that is used to calibrate the Hull-White yield curve model. Is defined as the root mean square deviation between the selected Black-Scholes volatility values and the implied Black-Scholes volatility calculated from the Hull-White prices.

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• Key Concepts: 
  CHI stands for Credit and Hedge Instrument. It is a component of the IS-B-RA-MR Market Risk Analysis module in SAP. CHI is used to analyze the credit and hedge instruments of a company, such as bonds, derivatives, and other financial instruments. It helps to identify potential risks associated with these instruments and provides insights into how to manage them. 
  
  How to use it: 
  The CHI component of the IS-B-RA-MR Market Risk Analysis module can be used to analyze credit and hedge instruments. It can be used to identify potential risks associated with these instruments and provide insights into how to manage them. The CHI component also provides tools for analyzing the performance of these instruments over time. 
  
  Tips & Tricks: 
  When using the CHI component of the IS-B-RA-MR Market Risk Analysis module, it is important to ensure that all relevant data is included in the analysis. This includes data on the instrument itself, as well as data on its performance over time. Additionally, it is important to ensure that all relevant risk factors are taken into account when analyzing the instrument. 
  
  Related Information: 
  The IS-B-RA-MR Market Risk Analysis module also includes other components such as Credit Risk Analysis (CRA), Interest Rate Risk Analysis (IRRA), and Liquidity Risk Analysis (LRA). These components can be used in conjunction with CHI to provide a comprehensive view of a company's risk profile. Additionally, there are various third-party tools available that can be used to supplement the analysis provided by the IS-B-RA-MR Market Risk Analysis module.