An “Economical” Pricing Model for Hybrid Products
4.2.1 Optimal conversion strategy
4.3 Two-Factor Numerical Procedure
4.3.2 Stock price dynamics under a stochastic interest rate
4.5 Pricing Convertible Bonds Subject to Interest Rate Risk and Default Risk
Convertible bonds are hybrid products very common in the financial industry. A fundamental role played by such securities is to provide funding for firms at lower costs with respect to other financial contracts, ...
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