Brainy Quote of the Day

Sunday, April 10, 2011

Physics and Finance...



For the students that wanted to get away from science in the world of finance: there is NO escape...resistance is futile! (Sorry...went Borg for a second).

The cover is titled "Econophysics." It's probably a bit more in depth than my course in Engineering Economic Analysis.

One of the areas physicists go into after undergrad and graduate school is on the NYSE as stock brokers. One gentleman I know got his undergrad at UCLA, his master in physics at UT and another masters at Princeton. He went to Wall Street after that.

Stochastic modeling (defined) is for the "purpose of estimating the probability of outcomes within a forecast to predict what conditions might be like under different situations." This predictive modeling is a direct byproduct of Monte Carlo simulations used in Nuclear Physics in the construction of the first atomic bomb. It's a method of calculating probable outcomes and risks associated, which one needs in the construction of weapons of mass destruction as well as stock portfolios...

Probably not an analogy that sets well...here's the related paper (unrelated to the book cover above):
Structure & Response in the World Trade Network

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