What is backward equation
What is backward equation?
Expert
The backward equation termed as also the backward Kolmogorov equation it is
∂p/∂t + ½ B(y,t)2∂2p/∂y2 + A(y,t) ∂p/∂y = 0
This should be solved backwards in t with given last data.
For illustration, if we wish to compute the expected value of a few functions F(S) at time T we should solve this equation for the function p(S, t) along with
p(S, T) = F(S).
A CD/$ bank trader is at present quoting a small figure bid-ask of 35-40, while the rest of the market is trading at CD1.3436-CD1.3441. What is implied regarding the trader's beliefs by his prices?The trader have to think the Canadian dollar wi
What is the function of sinking fund in the retirement of an outstanding bond issue?
Explain an example of probabilities in a simple coin-tossing experiment one thousand tosses.
Explain the purpose of alpha and beta in Capital Asset Pricing Model.
Explain in brief the difference between financial risk and business risk?
Explain in brief capital rationing? What are reasons that a firm should practice capital rationing?
Your firm have just issued five year floating-rate notes indexed to six-month U.S. dollar LIBOR plus 1/4%. Describe the amount of first coupon payment your firm will pay per U.S. $1,000 of face value, if six-month LIBOR is at present 7.2%?Solution:
What is Meant by ‘Complete’ and ‘Incomplete’ Markets?
Explain valid criticisms of Value at Risk.
Which model is required for interaction of many companies regarding the process of default?
18,76,764
1950044 Asked
3,689
Active Tutors
1437404
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!