Principle of Consistency

Financial Mathematics → Principle of Consistency

According to the principle of consistency

For example,

Example 1.
For all $t_1\leq t_2$ prove that the principle of consistency holds for the accumulation factor

Solution:
Let $t_1\leq t_2$ , then for the principle of consistency we have to show that

We have

So,

Hence,

So, the principle of consistency is proved.