Τετάρτη 16 Οκτωβρίου 2024

Applications of Mathematics: Finance and Banking

In financial mathematics, traders can buy or sell stocks in a company commodities like oil and gold or derivatives which are “virtual” goods whose prices are derived from the change of other things. For example, you can buy options which could allow you to buy or sell a stock at a particular price at some point in the future – if you still want to at that time.
Financial analysts have many different mathematical tools to help them make better decisions for example statistical models to analyse historic economic data or probability and Stochastic calculus to predict the behaviour of financial markets. Particularly famous is the Black-Scholes equation a partial differential eqaution used to find the correct value of derivatives.

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