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ISSN: 1549-3644 (Print)
ISSN: 1558-6359 (Online)
Research Article Open Access

Stochastic Model for Pricing Normal Bonds when Maturity Periods Cross Over to Pandemic Period

Sulaiman Sani1 and Siphelele Lushaba2
  • 1 Department of Mathematics, University of Eswatini, Swaziland
  • 2 Sales and Audit, Eswatini Coca-Cola Beverages Company, Swaziland

Abstract

In this study, Ito form for normal bonds trading where maturity periods cross over to COVID-19 pandemic period is presented. It is shown that normal bonds in this period experience path reversals respective to their canonical paths. The criterion used in arriving at this striking result is also presented. As a key recommendation, it is necessary that bondholders enact flexible pricing laws that strengthen the issuer to continue trading in the present COVID-19 pandemic time through the reverse path identified in this study.

Journal of Mathematics and Statistics
Volume 19 No. 1, 2023, 13-19

DOI: https://doi.org/10.3844/jmssp.2023.13.19

Submitted On: 7 February 2023 Published On: 6 May 2023

How to Cite: Sani, S. & Lushaba, S. (2023). Stochastic Model for Pricing Normal Bonds when Maturity Periods Cross Over to Pandemic Period. Journal of Mathematics and Statistics, 19(1), 13-19. https://doi.org/10.3844/jmssp.2023.13.19

Open AccessCopyright: © 2023 Sulaiman Sani and Siphelele Lushaba. This is an open access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.

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Keywords

  • CAT Bond
  • Sub-Exponential Shock
  • Noise
  • Wiener Process
  • Issuer