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Trading Terms

Step Function

A simple function, also referred to as a piecewise constant function, is defined on an interval and can be partitioned into a finite number of subintervals. Within each subinterval, the function remains constant. This concept is commonly used in finance to represent cash flows over a specific time period. By breaking down a larger interval into smaller, constant intervals, we can better analyze and understand the behavior of the function. This approach provides a valuable tool for financial analysis and decision making.
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