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GIS Business : An Overview is a peer-reviewed scholarly journal and aims to publish original articles, review articles, case reports, short communications, etc. Journal indexed in SCOPUS, papers are not indexed. Send papers to editor@gisbusiness.org

Explicit time discretization programming approach to risk modelling


Abstract

In this paper we formulate an explicit time discretization model for modeling risk by establishing an initial value problem as a function of time. The model is proved stable and the scaled-stability regions can encapsulated the volatile macroeconomic condition pertaining to financial risk. The model is extended to multistage schemes where we test for convergence under higher-order difference equations. Further, for addressing advection problems we have used Runge-Kutta method to propose a multistep model and have shown its stability patterns against general and absolute stability conditions. The paper also provides second-order and forth-order algorithm for computational programming of the models in practice. We conclude by stating that explicit time discretization models are stable and adequate for changing business environment. Keywords: Explicit time discretization; Runge-Kutta Method; algorithms; computational programming; risk modeling.

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