Analyze the dynamic path - difference equation, Mathematics

Assignment Help:

One of the well-known class of models that involve a simple difference equation are models of mean reversion. These models typically take the form

yt+1 - yt = -a(yt - μ)where 0 < a< 1

In the equation above μ is the mean of yt.

a) Provide the intuitive explanation for the above equation.

b) Show homogenous, particular and then general solution for the difference equation.

c) Setting t=0 show the solution to the mean-reversion model.

d) Analyze the dynamic path of this model.


Related Discussions:- Analyze the dynamic path - difference equation

Quadaric equation, two numbers differ by 7 and have a product of 120.what a...

two numbers differ by 7 and have a product of 120.what are they ?

Calculate the area of remaining piece of cardboard, A piece of cardboard in...

A piece of cardboard in the shape of a trapezium ABCD & AB || DE, ∠ BCD = 900, quarter circle BFEC is removed. Given AB = BC = 3.5 cm, DE = 2 cm. Calculate the area of remaining p

Definition of inverse functions, Definition of inverse functions :  Given...

Definition of inverse functions :  Given two one-to-one functions f ( x ) and g ( x ) if ( f o g ) ( x ) = x  AND  ( g o f ) ( x ) = x then we say that f ( x ) & g ( x ) are i

Dividing, If I divide any number do I get the manservant 2 times

If I divide any number do I get the manservant 2 times

Find out arc length - applications of integrals, Find out the length of y =...

Find out the length of y = ln(sec x ) between 0 x π/4. Solution In this example we'll need to use the first ds as the function is in the form y = f (x). So, let us g

Geometria, un prisma retto ha per base un rombo avente una diagonale lunga ...

un prisma retto ha per base un rombo avente una diagonale lunga 24cm. sapendo che la superficie laterale e quella totale misurano rispettivamente 2800cm e3568cm ,calcola la misura

Homework, joey asked 30 randomly selected students if they drank milk, juic...

joey asked 30 randomly selected students if they drank milk, juice, or bottled water with their lunch. He found that 9 drank milk, 16 drank juice, and 5 drank bottled water. If the

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd