WEALTH ASSESSMENT OF TWO CORPORATE INVESTORS WHEN RETURN RATES FOLLOWS LINEAR AND QUADRATIC FUNCTIONS
Keywords:
stochastic systems, linear and quadratic returns, investors, wealth and corporate investorsAbstract
Modeling in financial mathematics is motivating uniqueness involving stochastic systems. Therefore, this examined stochastic systems with changes to measure the value of wealth for each corporate investor through linear and quadratic returns. The stochastic systems were solve analytical by implementing the Ito’s method of solution .The sufficient conditions were achieved which gave room for assessing each wealth for corporate investors. Consequently, the imprints on each solution of investors were analyzed accordingly. From the stochastic analysis of the table solutions we have as follows ; increase in the intrinsic growth rate increases in investors wealth; an increase in stock prices does indeed increase the value of wealth; when interest rates rise, the value of wealth decreases; a decrease in the interest rate increases the value of wealth; an increase in volatility decreases the value of wealth; more increase in volatility due to periodic parameter, the value of wealth becomes more sensitive to changes in the volatility of the underlying assets and finally, the second corporate investors has the largest value of wealth in the portfolio of investments. However, the effects of the significant parameters of stochastic variables were successfully discussed as it affects each independent corporate investor.
References
Adeosun, M.E., Edeki, S.O., Ugbebor, O.O. (2015): Stochastic analysis of stock market price models: A case study of the Nigerian Stock Exchange (NSE). – WSEAS transactions on Mathematics 14: 353-363.
Amadi, I.U., Anthony, C. (2022): Stochastic Analysis of Asset price Returns for capital market Domain. – International Journal of Mathematical and Statistics Studies 10(3): 28-38.
Amadi, I.U., Igbudu, R., Azor, P.A. (2021): Stochastic analysis of the impact of growth-rates on stock market prices in Nigeria. – Asian Journal of Economics, Business and Accounting 21(24): 9-21.
Amadi, I.U., Okpoye, O.T. (2022): Application of stochastic model in estimation of stock return rates in capital market investments. – International Journal of Mathematical Analysis and Modelling 5(2): 108-120.
Amadi, I.U., Ogbogbo, C.P., Osu, B.O. (2022): Stochastic analysis of stock price changes as markov chain in finite states. – Global Journal of Pure and Applied Sciences 28(1): 91-98.
Amadi, I.U., Vivian, M.J.O. (2022): A stochastic analysis of stock price variation assessments in Oando Nigeria, Plc. – International Journal of Mathematical Analysis and Modelling 5(2): 216-228.
Davies, I., Uchenna, A.I., Roseline, N. (2019): Stability analysis of stochastic model for stock market prices. – International Journal of Mathematical and Computational Methods 4: 79-86.
Ekakaa, E.N., Nwobi, F.N., Amadi, I.U. (2016): The impact analysis of growth rate on securities. – Journal of Nigeria Association of Mathematical Physics 38: 279-284.
Farnoosh, R., Rezazadeh, H., Sobhani, A., Behboudi, M. (2015): Analytical solutions for stochastic differential equations via Martingale processes. – Mathematical Sciences 9: 87-92.
Jankauskienė, I., Miliūnas, T. (2020): The stability analysis of the market price using Lambert function method. – Lietuvos Matematikos Rinkinys 61: 13-17.
Ofomata, A.I.O., Inyama, S.C., Umana, R.A., Omane, A.O. (2017): A stochastic Model of the Dynamics of Stock Price for Forecasting. – Journal of Advances in Mathematics and Computer Science 25(6): 1-24.
Osu, B.O. (2010): A stochastic model of the variation of the capital market price. – International Journal of Trade, Economics and Finance 1(2): 297-302.
Osu, B.O., Amadi, I.U. (2022): A stochastic Analysis of stock market price fluctuations for capital market. – Journal of Applied Mathematics and Computation 6(1): 85-95.
Osu, B.O., Okoroafor, A.C., Olunkwa, C. (2009): Stability Analysis of Stochastic model of Stock market price. – African Journal of Mathematics and Computer Science 2(6): 98-103.