Random exchange rate and random interest rate
- Autor:
- Christian Dorner
Unfortunately, one can't predict all these influences. Hence, we assume the key interest
rate as a sequence, like the exchange rate before. We start at p0 = 7 and define pn+1 = pn+X, where X is a random variable with distribution N(0; 0.42). We choose the
values p0 and , such that pn hardly takes negative values. For more realistic demands
one has to be careful to avoid negative values strictly. Furthermore realistic values are
currently very small, therefore some visual effects don't emerge. Nevertheless, we develop
further the GeoGebra applet and get the following:
Figure 4.1
Figure 4.2
Now there are many possible scenarios, two possibilities are shown in figure 4.
Again pupils shall make some observations with focus on e.g. "What is the difference
between the debt level pathways of credit 1, 2, 3 and the debt level pathway of credit
4?" or "What happens to the debt level pathway if the key interest rate increases?" or
"In which sense is it wise to raise credit 3?"