stochastic processes in finance
Stochastic processes in finance refer to mathematical models used to describe the evolution of financial variables over time, considering random fluctuations. These processes are essential for capturing uncertainty in financial markets and analyzing various financial phenomena. By incorporating randomness, they allow for probabilistic evaluation of asset prices, option pricing, risk management, and portfolio optimization. Stochastic processes provide a framework for understanding the dynamics of financial systems and aid in making informed investment decisions.
Requires login.
Related Concepts (1)
Similar Concepts
- deterministic financial systems
- stochastic calculus
- stochastic control
- stochastic control theory
- stochastic differential equations
- stochastic dynamical systems
- stochastic dynamics
- stochastic modelling
- stochastic models
- stochastic networks
- stochastic optimization
- stochastic prediction
- stochastic process
- stochastic processes
- stochastic volatility models