Mathematica Eterna
Open Access

ISSN: 1314-3344

Abstract

Solutions to a partial differential equation involving the provision of the pool of retail loans

Huizhen Yu, Shaoyong Lai and Aiyin Wang

A partial differential equation, which represents the provision of the pool of retail loans, is investigated. Solutions for the equation are given explicitly under certain circumstances. The provisions covering expected losses of collateralized retail lending due to default are measured by using the option approach.

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