Risk and reward values are calculated for many types of mechanisms. There are two types of values for risk and reward: margin and amount.
The risk margin is the percentage by which actual transacted value would have to decrease relative to forecast transacted value over the remainder of the deal term for the currently forecast target band to be missed. Similarly, reward margin is the percentage increase required to reach the target band above.
Risk and reward amounts are then calculated for a program line by determining the amount the forecast earnings would change over the remainder of the program line term if the actual transacted value decreased/increased by the program line's risk and reward margins.
You can learn more about risks and rewards in the Watchlist App.