Stationarity and Equilibrium under Mean-Reversion; Non-stationarity and Instability: Explosive
Behaviour; Unit Root and Structural Break: An Important Distinction; Unit Root Test and Integration
Order; Co-integration and Long-Run Equilibrium; Short-Run Disequilibrium and Error-Correction;
Impulse Response and Stress-Testing; Conditional Volatility and Value-at-Risk; Default Probability
(PD) and Exposure at Default (EAD); Explanation and examples with reference to Financial Sector and
Corporate Sector.
