León, Ángel; Carmona, Julio - Instituto Valenciano de Investigaciones Económicas (IVIE) - 2007
We analyze extensively the characteristics of the solution to an irreversibleinvestment decision when the only source of uncertainty comes from interest rates.They are assumed to be driven by the popular Cox-Ingersoll-Ross (CIR) stochasticprocess. Particular attention is paid to the impact that...