Hi guy, i have a problem regarding to Q25, p207, ss3, book1 of schweser study notes. solution said that F(x)=1 for all x>b… my understanding is p(x)=0 for all x out of the bond a-b, rite? then F(x) is just the cumulative of p (x), why F(x) should not = 0? Thanks in advance!!!
F(x) is the cumulative of p(u) where u=[-infinite, x] although x>b, the cumulative value of p(x) where x=[a,b] has already got to 1, even if the other p(x)s equals to 0.
F(x) = P(X <= x) so here F(b + 176.23) = P(X<= b + 176.23) = 1 since X is below b for sure and for certain.