The replacement cost is calculated at the netting set level as a simple algebraic sum (floored at zero) of the derivatives’ market values at the reference date, provided that value is positive. Thus, using the market values indicated in the table (expressed in thousands):

RC = max {V - C; 0} = max {100 - 30 - 50; 0} = 20
 

The replacement cost is positive and there is no exchange of collateral (so the bank has not received excess collateral), which means the multiplier will be equal to 1.