Matches in DBpedia 2015-10 for { ?s ?p "The seven states of randomness in probability theory, fractals and risk analysis are extensions of the concept of randomness as modeled by the normal distribution. These seven states were first introduced by Benoît Mandelbrot in his 1997 book "Fractals and Scaling in Finance", which applied fractal analysis to the study of risk and randomness. This classification builds upon the three main states of randomness: mild, slow and wild.Financial risk management is the practice of economic value in a firm by using financial instruments to manage exposure to risk, particularly credit risk and market risk. Other types include Foreign exchange, Shape, Volatility, Sector, Liquidity, Inflation risks, etc. Quant is a broad term that covers any person who uses math for practical purposes, including financial engineers. Quant is often taken to mean “financial quant,” in which case it is similar to financial engineer. The difference is that is it possible to be a theoretical quant, or a quant in only one specialized niche in finance, while “financial engineer” usually implies a practitioner with broad expertise.Generally, mathematical finance will derive and extend the mathematical or numerical models without necessarily establishing a link to financial theory, taking observed market prices as input. One example would be modern portfolio theory, a theory of finance that attempts to maximize portfolio expected return for a given amount of portfolio risk, or equivalently minimize risk for a given level of expected return, by choosing the proportions of various assets. Another example would be valuation of options: call options give the beneficiary the right to require the grantor to sell or convey the property to them at the agreed price on exercise, while put options give the beneficiary the right to require the grantor to buy or receive the property at the agreed price on exercise.The importance of seven states of randomness classification for mathematical finance is that methods such as Markowitz mean variance portfolio and Black–Scholes model may be invalidated as the tails of the distribution of returns are fattened: the former relies on finite standard deviation (volatility) and stability of correlation, while the latter is constructed upon Brownian motion."@en }
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- Seven_states_of_randomness abstract "The seven states of randomness in probability theory, fractals and risk analysis are extensions of the concept of randomness as modeled by the normal distribution. These seven states were first introduced by Benoît Mandelbrot in his 1997 book "Fractals and Scaling in Finance", which applied fractal analysis to the study of risk and randomness. This classification builds upon the three main states of randomness: mild, slow and wild.Financial risk management is the practice of economic value in a firm by using financial instruments to manage exposure to risk, particularly credit risk and market risk. Other types include Foreign exchange, Shape, Volatility, Sector, Liquidity, Inflation risks, etc. Quant is a broad term that covers any person who uses math for practical purposes, including financial engineers. Quant is often taken to mean “financial quant,” in which case it is similar to financial engineer. The difference is that is it possible to be a theoretical quant, or a quant in only one specialized niche in finance, while “financial engineer” usually implies a practitioner with broad expertise.Generally, mathematical finance will derive and extend the mathematical or numerical models without necessarily establishing a link to financial theory, taking observed market prices as input. One example would be modern portfolio theory, a theory of finance that attempts to maximize portfolio expected return for a given amount of portfolio risk, or equivalently minimize risk for a given level of expected return, by choosing the proportions of various assets. Another example would be valuation of options: call options give the beneficiary the right to require the grantor to sell or convey the property to them at the agreed price on exercise, while put options give the beneficiary the right to require the grantor to buy or receive the property at the agreed price on exercise.The importance of seven states of randomness classification for mathematical finance is that methods such as Markowitz mean variance portfolio and Black–Scholes model may be invalidated as the tails of the distribution of returns are fattened: the former relies on finite standard deviation (volatility) and stability of correlation, while the latter is constructed upon Brownian motion.".