Investor's wiki

Boundary Conditions

Boundary Conditions

What is agreed boundary?

An agreed boundary is when property owners support another line separating their properties. The line may not be the true boundary, and it doesn't host legal force until the two gatherings consent to a great deal line arrangement.

More profound definition

At the point when there is a dispute about the genuine location of a property line, the owners can choose to settle in arbitration as opposed to going to court. In arbitration, they might consent to a boundary, which gives the two owners control of the outcome.
Property lines that fall far over the recently studied line could lean toward one property owner over another. For this dispute, the line might be approved and turned into an agreed boundary assuming that the two players are content with the resolution. In this type of case, everybody in question is as yet subject to any city, state, or federal laws that apply to the land being referred to, and they likewise need to consent to a great deal line arrangement for the boundary to hold up in court should another dispute emerge.
Anything on the land or property being referred to is likewise subject to the agreed boundary. The agreed boundary is likewise enforceable against new owners of the property, notwithstanding what an assessor views as the genuine limits of the properties.
Hoping to move to a home with additional pleasant limits? Get a great rate on another mortgage.

Agreed boundary model

A family purchases land next to an unfilled parcel and plans to build a house. Subsequent to reviewing the property, they are educated that the line is in dispute with the unfilled parcel's owner. After some careful negotiation between the two players, the property owners settle on another boundary that is beneficial to both of their requirements. They consent to a ton line arrangement to cherish the agreed boundary into law.


  • Boundary conditions change as indicated by whether the option is American or European, since American options can be practiced prior to expiry.
  • The absolute least value for an option is zero, since an option can't be sold for a negative amount of money.
  • Boundary conditions were utilized to set least and maximum potential values for call and put options prior to the presentation of binomial tree and Black-Scholes pricing models.
  • The maximum value in a boundary condition is set to the current value of the underlying asset.