Financial Mathematics


	Financial Mathematics

kaferico

10-14-2009 8:02 AM

39 views

tags:

math awareness connections

kaferico says:

I always find interesting when business major students claim they do not need to learn algebra or any mathematics course for their career because it only involves basic arithmetic. Well, I hope they read this interesting article from Plus Magazine about "Financial Mathematics." Click the link below to read the full article.

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<div style="margin: 12px 0px; font-family: arial; color: #333333; background: #ffffff; border: solid 4px #e5e5e5; width: 100%; clear: left;"><div class="CM_CTB_Content_Wrap" style="margin: 0px; padding: 0px;background-color: #ffffff;"><div style="border-bottom: solid 1px #dcdcdc; white-space: nowrap; margin-bottom: 8px; background-color: #eeeeee ;background-image: url(http://clipmarks.com/images/source-bg.gif); background-repeat: repeat-x; height: 24px; line-height: 24px; vertical-align: middle; padding-bottom: 4px; color: #666666; font-size: 10px;" ><a href="http://clipmarks.com/clip-to-blog/" title="see clips that are hot right now"><img src="http://content.clipmarks.com/blog_embed/fd6a3d41-9e33-4aa4-bba5-1186f3b0865d/A0A672EE-F140-435E-A0A0-8B0D9CEB6678/" alt="" width="19" height="19" border="0" style="vertical-align: middle; margin: 0px 4px; display: inline; border: none; float:none;" /></a>clipped from <a title="http://plus.maths.org/issue52/features/finance/index.html" href="http://plus.maths.org/issue52/features/finance/index.html" style="font-size: 11px;">plus.maths.org</a></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://plus.maths.org/issue52/features/finance/index.html">What is financial mathematics?</blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://plus.maths.org/issue52/features/finance/index.html"><div align="center"><img src="http://content7.clipmarks.com/blog_cache/plus.maths.org/img/F22B863B-991E-483D-B8A2-B7DDF65C9A77" alt="icon" /></div></blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://plus.maths.org/issue52/features/finance/index.html">I was drawn into financial maths not because I was interested in finance, but 
because I was interested in making good decisions in the face of uncertainty.</blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://plus.maths.org/issue52/features/finance/index.html">Cardano, famously, commented that knowing that the chance of a fair dice coming 
up with a six is one in six is of no use to the gambler since probability does 
not predict the future. But it is of interest if you are trying to establish 
whether a gamble is fair or not; it helps in making good decisions.</blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://plus.maths.org/issue52/features/finance/index.html">Financial mathematicians investigate markets on the basis of a simple premise; 
when you price an asset it should be impossible to make money without the risk 
of losing money, and by symmetry, it should be impossible to lose money without 
the chance of making money.</blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://plus.maths.org/issue52/features/finance/index.html"><CITE>Financial mathematics needs to tell not only what people ought to do, but 
also what people actually do.</CITE></blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://plus.maths.org/issue52/features/finance/index.html"><CITE>Banks need high level maths skills because that is how the bank makes 
money.</CITE></blockquote></div><div style="margin: 0px 6px 6px 4px;"><table style="font-size: 11px;border-spacing: 0px;padding: 0px;" cellpadding="0" cellspacing="0" width="100%"><tr><td style="background:transparent;border-width:0px;padding:0px;">&nbsp;</td><td align="right" style="background:transparent;border-width:0px;padding:0px;width:107px" width="107"><a href="http://clipmarks.com/share/A0A672EE-F140-435E-A0A0-8B0D9CEB6678/blog/" title="blog or email this clip"><img src="http://content8.clipmarks.com/images/c2b-foot.png" border="0" alt="blog it" width="107" height="17" style="border-width:0px;padding:0px;margin:0px;" /></a></td></tr></table></div></div>

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