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Standard economic theory suggests that in relatively open international financial markets, the savings of any country would flow to countries with the most productive investment opportunities; hence, saving rates and domestic investment rates would be uncorrelated, contrary to the empirical evidence suggested by Martin Feldstein and Charles ...
Optimal stopping problems can be found in areas of statistics, economics, and mathematical finance (related to the pricing of American options). A key example of an optimal stopping problem is the secretary problem.
Merton's portfolio problem is a problem in continuous-time finance and in particular intertemporal portfolio choice. An investor must choose how much to consume and must allocate their wealth between stocks and a risk-free asset so as to maximize expected utility .
By Jill Krasny and Zachry Floro Math class may have seemed pointless back in the day, but it turns out all those confusing equations are quite useful. Math can be used to solve every money problem ...
Mathematical finance, also known as quantitative finance and financial mathematics, is a field of applied mathematics, concerned with mathematical modeling in the financial field. In general, there exist two separate branches of finance that require advanced quantitative techniques: derivatives pricing on the one hand, and risk and portfolio ...
This is a list of equations, by Wikipedia page under appropriate bands of their field. Eponymous equations The following equations are named after researchers who ...
All the equations above remain true in the case of a system of equations in unknowns. In other words, suppose f ( x , a ) = 0 {\displaystyle f(x,a)=0} represents a system of n {\displaystyle n} equations involving the vector of n {\displaystyle n} unknowns x {\displaystyle x} , and the vector of m {\displaystyle m} given parameters a ...
Monte Carlo methods are used in corporate finance and mathematical finance to value and analyze (complex) instruments, portfolios and investments by simulating the various sources of uncertainty affecting their value, and then determining the distribution of their value over the range of resultant outcomes.