Unexpected events are introduced to the asset replacement algorithm, and modeled by a Poisson process for all cash-flows. Resale price result is expected to decrease randomly with jumps. A risk-neutral stopping time, evaluating the probability of a gain from the first minimum in the valuation...

A new short-rate model and a new explicit instantaneous mean reversion formula are introduced. The introduction is presented via a comparison of various short-rate one factor models, which are calibrated and analyzed numerically via a Monte Carlo simulation. Two variance reduction techniques,...