> ## Documentation Index
> Fetch the complete documentation index at: https://docs.activeviam.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Discount factor hedge

<table><tr><th>Description</th><td>Supervisory discount factor for hedge trade exposures</td></tr><tr><th>Reference</th><td><a href="https://www.bis.org/basel_framework/chapter/MAR/50.htm?inforce=20230101&published=20200708#paragraph_MAR_50_20230101_50_23">\[MAR50.23]</a></td></tr><tr><th>Notation</th><td>$DF_i$, $DF_h$</td></tr><tr><th>Formula</th><td>$DF = \frac{1 - e^{-0.05 \cdot M}}{0.05 \cdot M}$</td></tr></table>

We recommend displaying hierarchy [\[TradePosition\].\[Trades\]](./tradeposition.trades) to display discount factors applied to exposures at default.

## See also

* [Correlation r\_hc](./correlation-r_hc)
* [HMA](./hma)
* [Hedge Notional](./hedge-notional)
* [Hedge Remaining Maturity](./hedge-remaining-maturity)