CONCLUDING REMARKS

This chapter describes financial contracts as agreements regarding exchanges of cash flows that follow certain patterns. These patterns depend on market conditions, counterparty char­acteristics and behavioral assumptions; they may also depend on each other's performance.

The main types of pattern events refer to the results of principal and interest payments, use of credit enhancements, and behavior cash flows. As we have seen, their values and time can be from fixed to variable. The amount and types of financial events during the lifetime of a financial contract could reach a high degree. A transparent and easy analysis of the events is based on mapping and analyzing them based on their types and their interactions.

NOTES

1. The usage of the existing complex and dynamic transaction systems of intraday deals, executed within the time window of 10 am to 3 pm, may include some degree of speculation due to the fact that accruals can be earned during these five hours.

2. The months July and August were renamed for Julius Caesar and Augustus Caesar in ancient Rome. In honor of these great Caesars, both months were set to last 31 days. But, at the time, each month was only 30 days long, so days were taken from the last month of the year which was February at that time.

3. Brammertz, Willi; Akkizidis, Ioannis; Breymann, Wolfgang; Entin, Rami; and Rustmann, Marco Unified Financial Analysis, The missing links of finance (Wiley 2009).

4. See more information under the following link www.projectactus.org.

5. Principal amortization.

6. After renegotiation between the counterparties the contract is restructured in regards to maturity. This may happen for instance when avoiding a default event due to the incapability of the obligor (i.e., borrower) to pay back the principle at the predefined PIT or TTC in the original contract.

7. Assuming that the asset is tradable and is liquidated for covering credit losses; also there are no legal implications for passing the asset to the lender.

8. Creditratingandspreads.

9. Assuming that guarantors or protection sellers will not default in fulfilling their obligations.