Wednesday, October 14, 2009

Financial Mathematics

I always find interesting when business major students claim they do not need to learn algebra or any mathematics course for their career because it only involves basic arithmetic. Well, I hope they read this interesting article from Plus Magazine about "Financial Mathematics." Click the link below to read the full article.
clipped from plus.maths.org
What is financial mathematics?
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I was drawn into financial maths not because I was interested in finance, but
because I was interested in making good decisions in the face of uncertainty.
Cardano, famously, commented that knowing that the chance of a fair dice coming
up with a six is one in six is of no use to the gambler since probability does
not predict the future. But it is of interest if you are trying to establish
whether a gamble is fair or not; it helps in making good decisions.
Financial mathematicians investigate markets on the basis of a simple premise;
when you price an asset it should be impossible to make money without the risk
of losing money, and by symmetry, it should be impossible to lose money without
the chance of making money.
Financial mathematics needs to tell not only what people ought to do, but
also what people actually do.
Banks need high level maths skills because that is how the bank makes
money.
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22 comments:

Anonymous said...

Gendry Montesino.

What i learned from this is that math is very important. Math is not only used for engeers or for just accountants. There is also some things called Financial Math, this wiill help me in the future with the fiancial affairs of my home. This is very important because like that i will not lose my home.

Anonymous said...

Julie Miller: Say learing Mathematics is important, but what I learn from this knowing math is important already i learn that math is not just for accountants. I learn that financial mathematics will help people in the future with home financial problems,so there know the amount to make so they want give to much or lose thire house.

Anonymous said...

Kris St.Gerard:I think learning mathematics is will be good for career. especially if you have to do a lot of math to calculate the amount of money. So many times you might find some things unneccessary but trust along the way there will be a time you may need that exact topic that you hated. It could help start a firm foundation for your career.

Anonymous said...

Hugo Garcia

This article helped me gain importance of how math is important. One of the ways its helped me was to understand that math is needed for almost everthing we do and analyse. This article is important because it can help in the long run with the financial affairs of my home when I have a family and not losing it.

Anonymous said...

victor herrera: math is one of the general subjects that is taught in school it is a fundemental resource for everyday life. after reading this post on math ive learned that math isnt just calculating numbers to find an answer but is used in eveyrday situations, like in the post where they talk about math being used in gambling many people dont realize that math will always be used even when lest expected.

Rafhael Petry Castro said...

First of all Mathematics is everywhere,even though sometimes people try to avoid it Math in the future will help all of us to control our fiancial affairs and will make things easier to control.
Its important that we learn math that way we will be able to have a more stable life controling our debts and putting us away from major problems.

Sunthia Saintilme said...

From reading this article on "Financial Mathematics" I believe that math is not only going to be invloved in school but also in the working fields such as buisness majors which is stated,and from my point of views future doctors, architects and even lawyers as well. From the article it states that "it is the interest if you are tying to establish whether a gamble is fair or not, but it helps in making good decisions" inwhich is very accurate because if we all walk around with a positive mind setting also knowing that the outcomes can also turn out to be the opposite from the positive,we are more capable of overcoming any obstacles and making good decisions.

Anonymous said...

Jeffrey Perez:

After reading this article I to came to a comprimise that math is a more important then I thought. The major role math plays in probability and results is signicant. If banks arent good in math then they wont make any money. Thats seems true for us so better math would equal making better decisions.

Jee Sun Lee said...

This article taught me how the math is important in my life. I learned that the math not just for accountants; it is for everyone no matter what their job is. We usually use math to count our money which is very important and there should be no mistakes. Learning math helps on this problem.

Anonymous said...

Lunie Louis-Charles: In this article it appears that you need math for almost everything. Work, financial need, how to mangage your money, and etc. Even thought I hate math, I would have to learn more about math because of the major I'm in.

Marie Petion said...

This article made it aware that mathethematic is very essential in different careers. As a financial mathematician you don't need to be an accountant use math but it is essential for the over all financial field. It allows you to keep track of your money and to find ways to increase it.

Anonymous said...

Camille Allen:I learned that you use math in your everday life and it is very important. This article is mainly about how financial affairs in math will benefit you in the future.Its always good to learn math skills because it will help you organize your finances beter and help you control the way your spend money.

Anonymous said...

Charles Rigg: Math is an important commodity to the World as it helps to keep things such as economy a float. Knowing Math is important for the running of your household, to budget and pay your bills. This article has characterized the importance of Math in some careers.

mary c said...

mary cano:
i think its a very interesting article because its true. math is everywhere.i liked the part on probability and business majors. i think that thats one of the main points in business, you have to figure out the probability of your business being successful or the probability of your business failing. math is important, not just the basics but everything all around because you never know what youre going to come across upon, financially.

Danny said...

Daniel Rojo-Campos

What i learned from this article is that math is all around us. We should take math in a postive way and not so negative. Since, i want to be in business in the future, i will need to learn a lot of math becasue i will be dealing with money. Also, learning math will help me may for my house bills, and for my car bills. No matter how much people hate math, they should always learn math.

Anonymous said...

Liset Roger:
We all use mathematics in our daily life unconsciously since math is everywhere around us. This article made it aware that we don’t only use math in our classes but we are going to use it for the rest of our life since is going to be present everyday. Not only accountants or math professor use math, also the doctors, lawyers, and other working field use math; further more you don’t need a career to use math cause you use it everyday to count money or in any financial situation. You should have a positive attitude towards math cause you’re going to see it and use it everyday.

Anonymous said...

Adon Hemley:
Learning mathematics in today's society in this day and age is very important. But at the same time it is very hard and alot of people find math difficult. I know that math is essential to a good education and this article hepled me to understand that even more. The finincial part helps people to understand probalitities.

Anonymous said...

Edrod Valcin...

I came to the conclusion that math is a vital apart of our society.This article helped me gain some insight to how math is needed in almost every aspect of our everyday life. Math isnt just crunching number is the application of these numbers in our everyday life.

Anonymous said...

Dayron Gomez

Well i learned that math is really something helpful but it is up to you on how you wanna take it. Math is not just for people that are going to use it in their careers, it is something that is used worldwide everyday and people should not take for granted the fact that they learned math and that they use it everyday. Math takes an important part on our daily lives we should consider giving more value to this.

Geovannie Valdez said...

Math is very important and is a necessity in our everyday lives. Everywhere that we turn to and everything that we do involves some sort of math. Whether it be simple arithmetic or more difficult forms of math, everything in our world has something that can relate to mathematics.

Anonymous said...

Reading this article makes me realise the importance of math in life in general. It reminds me that we do not use math only inside a classroom, but everywhere. Math helps us have a better control of our finaces. It's practicaly imposible to think of how many mathematical actions
we do everyday.
Jean-Bernard Latortue.

Anael said...

Math is one of the general subjects that is taught in school it is a fundemental resource for everyday life. after reading this post on math ive learned that math isnt just calculating numbers to find an answer but is used in eveyrday situations, like in the post where they talk about math being used in gambling many people dont realize that math will always be used even when lest expected.