Calculation of a Class of Confluent Hypergeometric Equation and Analysis of its Roles in Option Pricing Models

Joy Ijeoma Adindu-Dick

doi:10.52589/AJMSS-ZXRD77UV

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Calculation of a Class of Confluent Hypergeometric Equation and Analysis of its Roles in Option Pricing Models

African Journal of Mathematics and Statistics Studies

Vol. 6Issue 32023pp. 84–92Published 21 July 2023

DOI 10.52589/AJMSS-ZXRD77UV

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Abstract:

The confluent hypergeometric equation is one of the most important differential equations in physics, chemistry, finance and many more. This work deals with the power series solution of a class of confluent hypergeometric equation with α, a real constant and z, an independent variable. The confluent hypergeometric function of the first kind M(α,α+2,z) is derived together with the second power series solution, M ̃(α,α+2,z). The analysis of the roles of the derived function in option pricing models are given.

Keywords:Confluent Hypergeometric Equation Power Series Option Pricing Regular Singular Point.

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Copyrights

Authors retain copyright in their articles and have unrestricted rights to reuse, republish, archive, share, and distribute their work after publication.
All articles are published open access under the Creative Commons Attribution 4.0 International (CC BY 4.0) licence, which permits use, sharing, adaptation, distribution, and reproduction in any medium or format, including for commercial purposes, provided appropriate credit is given to the original author(s) and source.