Common use of Theorem 5 Clause in Contracts

Theorem 5. 2. Assume that δ > 0 or δ = 0, γ − r > σ2 and 0 ≤ k ≤ h( q ). Then the value of stock loan with automatic termination clause, cap and margin is given by ( 5.6) and (5.7). Moreover, if L > b then the stopping time τb ∧ τL is the optimal exercise time. If L ≤ b then τL is the optimal