I saw this text in the book - Interest Rate Modelling by Andersen volume 1 on Page 112:
I am unable to understand:
- How does instability arise when we use the Euler scheme on X(t)?
- What change does the transformation to Y(t) make?
- The last lines say that the transformation "will center X around its analytically known mean". Isn't the mentioned mean expression same regardless of the transformation to Y(t)?