Stochastic models

Definition:

Liability-matching models that assume that the liability payments and the asset cash flows are uncertain. Related: Deterministic models.

Investing Essentials


Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

Term of the Day

Stock split

Occurs when a firm issues new shares of stock and in turn lowers the current market price of its stock to a level that is proportionate to pre-split prices. For example, if IBM trades at $100 before... Read More

Subscribe to the Term of the Day via email Get the Term of the Day in your inbox!


Create your free portfolio