An Optimal Portfolio and Capital Management Strategy for Basel III Compliant Commercial Banks

We model a Basel III compliant commercial bank that operates in a financial market consisting of a treasury security, a marketable security, and a loan and we regard the interest rate in the market as being stochastic. We find the investment strategy that maximizes an expected utility of the bank’s...

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Bibliographic Details
Main Authors: Grant E. Muller, Peter J. Witbooi
Format: Article
Language:English
Published: Wiley 2014-01-01
Series:Journal of Applied Mathematics
Online Access:http://dx.doi.org/10.1155/2014/723873
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