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Abstract and Applied Analysis
Volume 2013, Article ID 857678, 8 pages
Research Article

A Stochastic String with a Compound Poisson Process

Department of Mathematics, Southwestern University of Finance and Economics, Chengdu 611130, China

Received 28 May 2013; Accepted 10 July 2013

Academic Editor: Shaoyong Lai

Copyright © 2013 Sheng Fan. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.


We investigate a compound Poisson infinite factor diffusion model which describes the relationship between the infinite-dimension random risk resource and the corresponding stochastic process. We derive the no-arbitrage condition on the drift of instantaneous forward rates in the compound model and study the impact of random jump on the price of the zero-coupon bond.