The Valuation of Contract Deposit and Purchase Price

Chien-Ming Huang () and Ta-Cheng Chang
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Chien-Ming Huang: Department of Banking and Finance, Tamkang University, New Taipei City 251301, Taiwan
Ta-Cheng Chang: Department of International Business, Soochow University, Taipei 100006, Taiwan

Mathematics, 2022, vol. 10, issue 23, 1-17

Abstract: This paper evaluates the deposit and purchase pricing of purchase contracts in a risk-neutral framework. First, we determine the fair deposit price of a single-installment purchase contract based on theoretical modeling and numerical analysis. Second, the buyer’s threshold pricing in dual-installment and multi-installment contracts is investigated under the framework of compound options. Lastly, the pricing behavior of deposits and purchases is further analyzed using a simultaneous equations modeling framework.

Keywords: deposit; purchase price; contingent claim (search for similar items in EconPapers)
JEL-codes: C (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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