DOAJ Open Access 2023

Valuation of deposit insurance Black–Scholes model using Banach contraction principle

Sunday O. Edeki Sunday E. Fadugba Chaudry Masood Khalique

Abstrak

Deposit insurance is a mechanism by which financial institutions are stabilized. The danger of a bank’s inability to meet its consumer commitments due to its suspended license is insured through deposit insurance practices. A flat-rate insurance scheme would contribute to moral hazard and a financial panic when banks indulge in dangerous practices. Hence, a reliable model with an explicit solution is required. This paper considers a risk rate model for deposit insurance engendered by the classical Black Scholes Option Pricing Model. The solutions are obtained via the application of Banach Contraction Mapping or Method. The procedures involved are straightforward, easy, and flexible, even without giving up accuracy. The desired explicit solutions are obtained with less computational time.

Topik & Kata Kunci

Applied mathematics. Quantitative methods

Penulis (3)

Sunday O. Edeki

Sunday E. Fadugba

Chaudry Masood Khalique

Format Sitasi

APA MLA BibTeX

Edeki, S.O., Fadugba, S.E., Khalique, C.M. (2023). Valuation of deposit insurance Black–Scholes model using Banach contraction principle. https://doi.org/10.1016/j.padiff.2023.100571

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Informasi Jurnal

Tahun Terbit: 2023
Sumber Database: DOAJ
DOI: 10.1016/j.padiff.2023.100571
Akses: Open Access ✓