A Review of Recent Results on Approximation of Solutions of Stochastic Differential Equations

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Abstract

In this article, we give a brief review of some recent results concerning the study of the Euler-Maruyama scheme and its high-order extensions. These numerical schemes are used to approximate solutions of stochastic differential equations, which enables to approximate various important quantities including solutions of partial differential equations. Some have been implemented in Premia [56]. In this article we mainly consider results about weak approximation, the most important for financial applications.

Original languageEnglish
Title of host publicationProgress in Probability
PublisherBirkhauser
Pages121-144
Number of pages24
DOIs
Publication statusPublished - 1 Jan 2011

Publication series

NameProgress in Probability
Volume65
ISSN (Print)1050-6977
ISSN (Electronic)2297-0428

Keywords

  • Euler-Maruyama scheme
  • Kusuoka scheme
  • Milshtein scheme
  • stochastic equations
  • weak approximations

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