Sunday, February 10, 2019

options - AFV Model Implementation for Convertible Bonds


I am reading the original AFV model paper for pricing convertible bonds.



https://cs.uwaterloo.ca/~paforsyt/convert.pdf


The paper is very technical and I am having trouble finding the actual PDE's to solve. Can someone who is familiar with the paper give me a hand? He gives the PDE to solve using the notation: (x=0) or (y=0) or (z=0). I would like a practical example for implementation using the complementary PDE's.




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