Patent ID: 8352351

Claim:
A method of using an apparatus to reduce accounting volatility and risk, the method including: storing in memory terms of a contract, the terms including a specification of at least one measure of a variation in a rate of return corresponding to a return on an investment portfolio, a contract rate of return on an investment associated with the investment portfolio, and a variable speed of adjustment factor used in determining the contract rate of return wherein the variable speed of adjustment factor is computed by using an amount of the at least one measure of the variation and the amount of the at least one measure of the variation changes over time; computing, by a digital computer accessing the memory and receiving market data corresponding to the at least one measure of the variation, the amount of the variation; calculating, by a digital computer accessing the memory, using the amount of the variation, and receiving market data, the amount of the adjustment speed factor; determining, by the computer receiving market data on the rate of return on the investment portfolio and by using the amount of the adjustment speed factor, at least one of a contract rate of return on the investment associated with the investment portfolio and a contract value for the investment associated with the investment portfolio; and outputting, by the computer, at least one of the determined contract rate of return and the determined contract value.