A Risk–Reward Model for On-line Financial Leasing Problem with an Interest Rate
As an important financing tool, the financial lease can help the lessee obtain the ownership of equipment after paying the rent till the expiration of the lease. Because the lessee does not know the exact length of using the equipment, the financial leasing problem can be viewed as an on-line problem. In this paper, we consider the on-line financial leasing problem with an interest rate where there are two lease options: financial lease and operating lease. We first discuss the traditional deterministic optimal competitive strategy by competitive analysis method. Next, we introduce the risk tolerance and forecast of the decision maker(the lessee) into this problem and acquire the optimal risk–reward strategy. Finally, we give numerical examples and the results show that the introduction of the interest rate and risk tolerance has a significant influence on the deterministic optimal strategy and risk–reward strategy.
KeywordsFinancial leasing Interest rate Risk tolerance Risk–reward model Competitive analysis
This paper was financially supported by the National Natural Science Foundation of China under Grant no. 71471065.
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