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   Scaling Factor
   















 

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Scaling Factor

(1) A multiplier or divisor used to bring a raw index number or other quantity into a desired range for trading purposes or for comparison with other figures. (2) A multiplier, originally set at three (3), used to increase a bank value at risk calculation to arrive at a capital requirement.

For more on regulatory thinking about scaling factors, please click "Key Risk Concepts: Market Risk"

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