Patent ID: 8438099

Claim:
A method for valuating a periodic reset total return index, the method comprising: identifying an index comprising a plurality of constituents, wherein at least one of the plurality of constituents generates an income flow; receiving a first valuation of the index and a second valuation of the income flow generated by the at least one of the plurality of constituents for a current period; calculating a third valuation of a periodic reset total return index by adding the first valuation of the index and the second valuation of the income flow generated by the at least one of the plurality of constituents for the current period; providing terms of a derivative contract between a plurality of parties based on the third valuation of the periodic reset total return index; and adjusting, on a periodic basis and upon transferring the income flow between the plurality of parties of the derivative contract, the third valuation of the periodic reset total return index by subtracting the second valuation of the income flow generated by the at least one of the plurality of constituents for a previous period from the third valuation of the periodic reset total return index, wherein the identifying of the index, the receiving of the first and the second valuation, the calculating of the third valuation, the providing of the terms of the derivative contract, and the adjusting of the third valuation are performed by a processor.