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Quantitative Behavioral Finance
Quantitative behavioral finance is a new discipline that uses mathematical and statistical methodology to understand behavioral biases in conjunction with valuation. The research can be grouped into the following areas: # Empirical studies that demonstrate significant deviations from classical theories. # Modeling using the concepts of behavioral effects together with the non-classical assumption of the finiteness of assets. # Forecasting based on these methods. # Studies of experimental asset markets and use of models to forecast experiments. History The prevalent theory of financial markets during the second half of the 20th century has been the efficient market hypothesis (EMH) which states that all public information is incorporated into asset prices. Any deviation from this true price is quickly exploited by informed traders who attempt to optimize their returns and it restores the true equilibrium price. For all practical purposes, then, market prices behave as though all ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Valuation (finance)
In finance, valuation is the process of determining the present value (PV) of an asset. In a business context, it is often the hypothetical price that a third party would pay for a given asset. Valuations can be done on assets (for example, investments in marketable securities such as companies' shares and related rights, business enterprises, or intangible assets such as patents, data and trademarks) or on liabilities (e.g., bonds issued by a company). Valuations are needed for many reasons such as investment analysis, capital budgeting, merger and acquisition transactions, financial reporting, taxable events to determine the proper tax liability. Valuation overview Common terms for the value of an asset or liability are market value, fair value, and intrinsic value. The meanings of these terms differ. For instance, when an analyst believes a stock's intrinsic value is greater (or less) than its market price, an analyst makes a "buy" (or "sell") recommendation. Moreov ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Behavioral Finance
Behavioral economics studies the effects of psychological, cognitive, emotional, cultural and social factors on the decisions of individuals or institutions, such as how those decisions vary from those implied by classical economic theory. Behavioral economics is primarily concerned with the bounds of rationality of economic agents. Behavioral models typically integrate insights from psychology, neuroscience and microeconomic theory. The study of behavioral economics includes how market decisions are made and the mechanisms that drive public opinion. The concepts used in behavioral economics today can be traced back to 18th-century economists, such as Adam Smith, who deliberated how the economic behavior of individuals could be influenced by their desires. The status of behavioral economics as a subfield of economics is a fairly recent development; the breakthroughs that laid the foundation for it were published through the last three decades of the 20th century. Behav ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Mathematical Finance
Mathematical finance, also known as quantitative finance and financial mathematics, is a field of applied mathematics, concerned with mathematical modeling of financial markets. In general, there exist two separate branches of finance that require advanced quantitative techniques: derivatives pricing on the one hand, and risk and portfolio management on the other. Mathematical finance overlaps heavily with the fields of computational finance and financial engineering. The latter focuses on applications and modeling, often by help of stochastic asset models, while the former focuses, in addition to analysis, on building tools of implementation for the models. Also related is quantitative investing, which relies on statistical and numerical models (and lately machine learning) as opposed to traditional fundamental analysis when managing portfolios. French mathematician Louis Bachelier's doctoral thesis, defended in 1900, is considered the first scholarly work on mathematical ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Financial Economics
Financial economics, also known as finance, is the branch of economics characterized by a "concentration on monetary activities", in which "money of one type or another is likely to appear on ''both sides'' of a trade". William F. Sharpe"Financial Economics", in Its concern is thus the interrelation of financial variables, such as share prices, interest rates and exchange rates, as opposed to those concerning the real economy. It has two main areas of focus:Merton H. Miller, (1999). The History of Finance: An Eyewitness Account, ''Journal of Portfolio Management''. Summer 1999. asset pricing, commonly known as "Investments", and corporate finance; the first being the perspective of providers of capital, i.e. investors, and the second of users of capital. It thus provides the theoretical underpinning for much of finance. The subject is concerned with "the allocation and deployment of economic resources, both spatially and across time, in an uncertain environment".See Fama ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Dynamical System
In mathematics, a dynamical system is a system in which a function describes the time dependence of a point in an ambient space. Examples include the mathematical models that describe the swinging of a clock pendulum, the flow of water in a pipe, the random motion of particles in the air, and the number of fish each springtime in a lake. The most general definition unifies several concepts in mathematics such as ordinary differential equations and ergodic theory by allowing different choices of the space and how time is measured. Time can be measured by integers, by real or complex numbers or can be a more general algebraic object, losing the memory of its physical origin, and the space may be a manifold or simply a set, without the need of a smooth space-time structure defined on it. At any given time, a dynamical system has a state representing a point in an appropriate state space. This state is often given by a tuple of real numbers or by a vector in a geome ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Net Asset Value
Net asset value (NAV) is the value of an entity's assets minus the value of its liabilities, often in relation to open-end, mutual funds, hedge funds, and venture capital funds. Shares of such funds registered with the U.S. Securities and Exchange Commission are redeemed at their net asset value. It is also a key figure with regard to hedge funds and venture capital funds when calculating the value of the underlying investments in these funds by investors. This may also be the same as the book value or the equity value of a business. Net asset value may represent the value of the total equity, or it may be divided by the number of shares outstanding held by investors, thereby representing the net asset value ''per share''. Overview Net asset value and other accounting and recordkeeping activities are the result of the process of fund accounting (also known as securities accounting, investment accounting, and portfolio accounting). Fund accounting systems are sophisticated ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Lawrence Summers
Lawrence Henry Summers (born November 30, 1954) is an American economist who served as the 71st United States secretary of the treasury from 1999 to 2001 and as director of the National Economic Council from 2009 to 2010. He also served as president of Harvard University from 2001 to 2006,"Historical Facts" Harvard University, retrieved March 31, 2017 where he is the Charles W. Eliot university professor and director of the Mossavar-Rahmani Center for Business and Government at Harvard Kennedy School. [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
James M
James is a common English language surname and given name: *James (name), the typically masculine first name James * James (surname), various people with the last name James James or James City may also refer to: People * King James (other), various kings named James * Saint James (other) * James (musician) * James, brother of Jesus Places Canada * James Bay, a large body of water * James, Ontario United Kingdom * James College, a college of the University of York United States * James, Georgia, an unincorporated community * James, Iowa, an unincorporated community * James City, North Carolina * James City County, Virginia ** James City (Virginia Company) ** James City Shire * James City, Pennsylvania * St. James City, Florida Arts, entertainment, and media * ''James'' (2005 film), a Bollywood film * ''James'' (2008 film), an Irish short film * ''James'' (2022 film), an Indian Kannada-language film * James the Red Engine, a character in ''Tho ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Fischer Black
Fischer Sheffey Black (January 11, 1938 – August 30, 1995) was an American economist, best known as one of the authors of the Black–Scholes equation. Background Fischer Sheffey Black was born on January 11, 1938. He graduated from Harvard College in 1959 and received a PhD in applied mathematics from Harvard University in 1964. He was initially expelled from the PhD program due to his inability to settle on a thesis topic, having switched from physics to mathematics, then to computers and artificial intelligence. Black joined the consultancy Bolt, Beranek and Newman, working on a system for artificial intelligence. He spent a summer developing his ideas at the RAND corporation. He became a student of MIT professor Marvin Minsky,Perry Mehrling, "Fischer Black and the Revolutionary Idea of Finance", Wiley (2005), 400 pages, and was later able to submit his research for completion of the Harvard PhD. Black joined Arthur D. Little, where he was first exposed to economic an ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Noise (economic)
Economic noise, or simply noise, describes a theory of pricing developed by Fischer Black. Black describes noise as the opposite of information: hype, inaccurate ideas, and inaccurate data. His theory states that noise is everywhere in the economy and we can rarely tell the difference between it and information. Noise has two broad implications. *It allows speculative trading to occur (see below). *It is indicative of market inefficiency. Loudon and Della Bitta (1988) refer to noise as “a type of disruption in the communication process” and go further stating that "each state of the communication process is susceptible to (this) message distortion." (As cited in Wu & Newell, 2003). Therefore, we can say that noise is a disruption within the communication process and can be found in all forms within the communication process. Some examples of noise could be distortion of a television advertisement or interference of a radio broadcast. This therefore would mean that your recepti ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Philosophical Transactions Of The Royal Society A
''Philosophical Transactions of the Royal Society A: Mathematical, Physical and Engineering Sciences'' is a fortnightly peer-reviewed scientific journal published by the Royal Society. It publishes original research and review content in a wide range of physical scientific disciplines. Articles can be accessed online a few months prior to the printed journal. All articles become freely accessible two years after their publication date. The current editor-in-chief is John Dainton. Overview ''Philosophical Transactions of the Royal Society A'' publishes themed journal issues on topics of current scientific importance and general interest within the physical, mathematical and engineering sciences, edited by leading authorities and comprising original research, reviews and opinions from prominent researchers. Past issue titles include "Supercritical fluids - green solvents for green chemistry?", "Tsunamis: Bridging science, engineering and society", "Spatial transformations: from f ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Gunduz Caginalp
Gunduz Caginalp was a mathematician whose research has also contributed over 100 papers to physics, materials science and economics/finance journals, including two with Michael Fisher and nine with Nobel Laureate Vernon Smith. He began his studies at Cornell University in 1970 and received an AB in 1973 "Cum Laude with Honors in All Subjects" and Phi Beta Kappa. In 1976 he received a Master's degree, and in 1978 a PhD, both also at Cornell. He held positions at The Rockefeller University, Carnegie-Mellon University and the University of Pittsburgh (since 1984), where he was a Professor of Mathematics until his death on December 7th, 2021. He was born in Turkey, and spent his first seven years and ages 13–16 there, and the middle years in New York City. Caginalp and his wife Eva were married in 1992 and had three sons, Carey, Reggie and Ryan. He served as the Editor of the ''Journal of Behavioral Finance'' (1999–2003), and was an Associate Editor for numerous journals. He rec ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
