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The concept of strong convexity extends and parametrizes the notion of strict convexity. Intuitively, a strongly-convex function is a function that grows as fast as a quadratic function. [11] A strongly convex function is also strictly convex, but not vice versa.
In finance, bond convexity is a measure of the non-linear relationship of bond prices to changes in interest rates, and is defined as the second derivative of the price of the bond with respect to interest rates (duration is the first derivative). In general, the higher the duration, the more sensitive the bond price is to the change in ...
In mathematical finance, convexity refers to non-linearities in a financial model.In other words, if the price of an underlying variable changes, the price of an output does not change linearly, but depends on the second derivative (or, loosely speaking, higher-order terms) of the modeling function.
Convexity is a geometric property with a variety of applications in economics. [1] Informally, an economic phenomenon is convex when "intermediates (or combinations) are better than extremes". For example, an economic agent with convex preferences prefers combinations of goods over having a lot of any one sort of good; this represents a kind of ...
Complex convexity — extends the notion of convexity to complex numbers. Convex analysis - the branch of mathematics devoted to the study of properties of convex functions and convex sets, often with applications in convex minimization. Convex combination - a linear combination of points where all coefficients are non-negative and sum to 1 ...
In mathematics, specifically statistics and information geometry, a Bregman divergence or Bregman distance is a measure of difference between two points, defined in terms of a strictly convex function; they form an important class of divergences.
Then convexity guarantees that the curves cannot intercept other than at the point of tangency, and the box is accordingly divided into 3 regions. The pale blue area is preferable to the point of tangency for Octavio but worse for Abby; the pale orange area is preferable for Abby but worse for Octavio; and the white area is worse for both.
then is called strictly convex. [1]Convex functions are related to convex sets. Specifically, the function is convex if and only if its epigraph. A function (in black) is convex if and only if its epigraph, which is the region above its graph (in green), is a convex set.