Financial Mathematics
The bisection method is a root-finding technique that repeatedly bisects an interval and then selects a subinterval in which a root exists. This method is based on the Intermediate Value Theorem, which guarantees that if a continuous function changes sign over an interval, there must be at least one root in that interval. The bisection method is particularly useful for functions where analytical solutions are difficult to find, providing a simple and reliable numerical approach to approximating roots.
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