Common Contracts
1 similar null contracts
Abstract A stock loan is a contract whereby a stockholder uses shares as collateral to borrow money from a bank or financial institution. In Xia and Zhou (2007), this contract is modeled as a perpetual American option with a time varying strike and...January 18th, 2012
Alternatively, if β ≤ 0, then the smooth pasting fails and there is no solution to (7) and associated conditions. In this case, V ∗ = ∞ and the option to repay the loan is never exercised.
