What is ACTUAL EXPOSURE

The amount of CREDIT RISK exposure in a DERIVATIVE or financial transaction , typically reflected as a MARKTOMARKET valuation. If DEFAULT occurs when actual exposure is positive to the nondefaulting party, a credit loss arises; if negative, no credit loss occurs. Actual exposure is one of two components, along with FRACTIONAL EXPOSURE , in the determination of total credit exposure. Also known as ACTUAL MARKET RISK , REPLACEMENTCOST. See also POTENTIAL EXPOSURE .ACTUAL MARKET RISK See ACTUAL EXPOSURE.ACTUALS Physical commodities , such as GRAINS, SOFTS, metals, and energy, which are traded and delivered under COMMODITY DERIVATIVE contracts.