galerkin finite element method for credit rating migration problem model with galerkin finite element method

In this presentation, we propose a finite element method to study the problem of credit rating migra_x0002_tion problem narrowed to a free boundary problem. free boundary indeed separates the high and low rating region for a firm and causes some difficulties including discontinuity of second order derivative of the problem. exploiting the weak formulation of the problem utilized in the galerkin method, the dis_x0002_continuity of second order derivative is averted. we show some convergence and stability of the proposed method. numerical results illustrate how derived convergence results are consistent into practice ones.