Sargent together with interest-rate options

By straight off , you've in all likelihood seen Tom Sargent's bully Ally Bank TV spot.


But , were I to needle Tom merely a flake , I mightiness enquire , "Tom , the Ally Bank CD allows y'all the choice of raising your CD charge per unit of measurement in 1 lawsuit over its two-year life. Can y'all explicate when to optimally practise that option?''  Or (second beer) , "Tom , to what portfolio optimization query is the response , combine a two-year CD alongside an American choice to heighten the charge per unit of measurement once?  You must accept merely about bully robust-control final result hither close parameter dubiety inwards dynamic interest-rate models."