Article ID Journal Published Year Pages File Type
468204 Computers & Mathematics with Applications 2013 9 Pages PDF
Abstract

Financial instruments have a random evolution and can be described by a stochastic process. It is shown that another approach for modeling financial instruments–considered as a (classical) random system–is by employing the mathematics that results from the formalism of quantum mechanics. Financial instruments are described by the elements of a linear vector state space and its evolution is determined by a Hamiltonian operator. It is further shown that interest rates can be described by a random function–which is mathematically equivalent to a two dimensional Euclidean quantum field.

Related Topics
Physical Sciences and Engineering Computer Science Computer Science (General)
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