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

Compute the derivative, Write an octave program that will take a set of poi...

Write an octave program that will take a set of points {x k , f k } representing a function and compute the derivative at the same points x k using 1. 2-point forward di erence

saxon math, what is the muttiplied number of mutttiplacation calle

what is the muttiplied number of mutttiplacation called

Find the equation of circle concentric – coordinate geometry, 1. A point P(...

1. A point P(a,b) becomes (3,c) after reflection in x - axis, and (d,6) after reflection in the origin. Show that a = 3, b = - 6, c = 6, d = 2 2. If the pair of lines ax² + 2pxy

Articulate reasons and construct arguments, By such interactions children l...

By such interactions children learn to articulate reasons and construct arguments. When a child is exposed to several interactions of this kind, she gradually develops the ability

Example of multiplication of matrix, Given So calculate AB. Sol...

Given So calculate AB. Solution The new matrix will contain size 2 x 4. The entry in row 1 and column 1 of the new matrix will be determined by multiplying row 1 of

Find the area of the shaded region, ABC is a right angled triangle in which...

ABC is a right angled triangle in which ∠A = 900. Find the area of the shaded region if AB = 6 cm, BC=10cm & I is the centre of the Incircle of ?ABC. Ans: ∠A =90 0 BC

Example of integrals involving trig functions, Example of Integrals Involvi...

Example of Integrals Involving Trig Functions Example: Estimate the following integral. ∫ sin 5 x dx Solution This integral no longer contains the cosine in it that

Metric and costamary, can you please help me with this topic that im on in ...

can you please help me with this topic that im on in classand I just don''t get it and can u help me with dividing fractions adding mutply subtract add

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