Method for estimating expected cash flow of an investment instrument

A method of estimating expected cash flow of an investment instrument comprising:

• (A) simulating a net cash flow time series of an investment instrument in which the net cash flow time series is comprised of a draw down time series and a distribution time series and the net cash flow time series is characterized by four characterizing parameters comprising money multiple (“MM”), internal rate of return (“IRR”), maximum depth (“depth”), and speed to maximum depth (“speed”), said simulating step comprising:
• (1) obtaining aggregate net cash flow time series data comprising the aggregated net cash flow time series data of a plurality of investment instruments;
• (2) obtaining statistics of the four characterizing parameters of the net cash flow time series data of the plurality of investment instruments;
• and
• (3) generating a new net cash flow time series by multiplying at least a portion of the aggregate net cash flow time series data by one or more scalar coefficients;
• wherein the one or more scalar coefficients are calculated such that the four characterizing parameters of the new net cash flow time series are statistically consistent with the statistics of the four characterizing parameters of the net cash flow time series data of the plurality of investment instruments;
• (B) repeating the simulating step a plurality of times to generate a plurality of new net cash flow time series;
• (C) generating a plurality of potential cash flow time series for the investment instrument, each of the potential cash flow time series being modeled after one of the plurality of new net cash flow time series;
• and
• (D) estimating expected cash flow from the plurality of potential cash flow time series.