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Explicit Finite Difference Method for Black-Scholes-Merton PDE (European Calls) Here we will implement a basic finite difference method to the solution of the Black-Scholes-Merton PDE. which of course models the value of any derivative contract in the absence of arbitrage (see the Wikipedia article for a more comprehensive list of assumptions.

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FINITE DIFFERENCE METHODS FOR POISSON EQUATION LONG CHEN The best well known method, finite differences, consists of replacing each derivative ... We use the following Matlab code to illustrate the implementation of Dirichlet boundary condition. Let bdNode be a logic array representing boundary nodes: bdNode(k)=1 if.

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Use the finite difference method and Matlab to calculate and plot: a) The temperatures at x = 0.05 m and 0.1 m in the wall as a function of time (until steady-state is reached). [Plot both temperatures in one single graph.] b) The temperature distribution T(x,t) in the wall at t=0 min. 30 min. 2 hours, and the steady state)..

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