All tagged finance

Quantum Finance: How Quantum Computers Will Change The World of Quantitative Finance

Quantum Finance: How Quantum Computers Will Change The World of Quantitative Finance

Ishan Gupta
Business Current Events

Quantitative Analysts, or “quants”, use complex algorithms and mathematical models to analyze data and predict outcomes, critical skills in the world of stock trading. Before the 1970s and 80s, successful traders sat down with CEOs and economists to gain exclusive information that, when combined with their intuition, allowed them to hedge educated bets on stocks. As market news became digitized, people with a background in math began to realize that stock markets displayed patterns, and complex models could be used to predict whether a stock was going up or down. They started using computers to analyze vast amounts of data, putting information through algorithms designed by mathematicians and computer scientists that returned instructions on buying or selling a particular stock. As computer technology advanced, algorithms became more complex, and the field of quantitative finance grew. Today, almost every trader, from day traders to massive hedge funds, uses research done by quants to help them decide which stocks to buy and sell. 

The Lottery Curse

The Lottery Curse

Jasmine Rawson
Personal Finance, Microeconomics

In March 1995, a used car trader named Lee Ryan won the lottery for £6,527,880. At the time, he lived in public housing built by local authorities in Braunston, England with his girlfriend and their three children. After getting married that summer, he spent £1 million on a country mansion and a variety of cars including a Bentley, Ferrari, Porsche, and BMW. He also bought two Ducati superbikes, a £125,000 plane, and a £235,000 Bell JetRanger helicopter. His entire life had been turned around. He had “prayed to God to make him a millionaire” while he had been serving a prison sentence for stealing cars, and it seemed that his desires had come to fruition. However, his life of joyful lavishness later faded as he and his wife split in 2003, and he lost about £2 million in failed business ventures and property investments. After countless losses, he eventually chose to reside in a rented flat in South London with homeless lodgers. In regards to the lottery, he claimed “the money was cursed” (Charlton 2014).

Viewing the World Through Complex Adaptive Systems

Viewing the World Through Complex Adaptive Systems

Samuel Jaffe
Science & Nature

Small differences can lead to large consequences or change outcomes. A popular example of this is that a butterfly could flap its wings in New York and the next day in Tokyo there will be rain instead of sunshine. This phenomenon is commonly known as the ‘Butterfly Effect’ and it highlights the relationship between minute conditions and ending outcomes within a system. Although interesting, the Butterfly Effect is only a piece in the puzzle of understanding our greater world. A larger piece to the puzzle, but by no means the complete picture, are Complex Adaptive Systems (CAS). If the Butterfly Effect represents the relationship in a system, then a CAS is the system itself.

Fixed Foreign Exchange Rate Regime

Fixed Foreign Exchange Rate Regime

Vincent Z. Yu
Finance

There are two major types of foreign exchange regimes: fixed exchange rate policy and floating. As its literal meaning on appearance, a fixed exchange rate is a regime in which a country’s currency exchange rate is tied to the currency of another country or the price of gold. A floating exchange rate policy, instead, gives the currency a much wider range to float without predominant regulatory control. The price of a particular currency in this scenario is almost purely driven by the relative supply and demand of the currency in the foreign exchange market. We will define the exchange rate in our discussion as the rate at which a domestic currency can be converted to one unit of U.S. Dollar, the value of which is assumed unchanged, we will now proceed with our discussion of the fixed-rate system.

The Lottery Curse

The Lottery Curse

Jasmine Rawson
Personal Finance, Microeconomics

In March 1995, a used car trader named Lee Ryan won the lottery for £6,527,880. At the time, he lived in public housing built by local authorities in Braunston, England with his girlfriend and their three children. After getting married that summer, he spent £1 million on a country mansion and a variety of cars including a Bentley, Ferrari, Porsche, and BMW. He also bought two Ducati superbikes, a £125,000 plane, and a £235,000 Bell JetRanger helicopter. His entire life had been turned around. He had “prayed to God to make him a millionaire” while he had been serving a prison sentence for stealing cars, and it seemed that his desires had come to fruition. However, his life of joyful lavishness later faded as he and his wife split in 2003, and he lost about £2 million in failed business ventures and property investments. After countless losses, he eventually chose to reside in a rented flat in South London with homeless lodgers. In regards to the lottery, he claimed “the money was cursed” (Charlton 2014).

Viewing the World Through Complex Adaptive Systems

Viewing the World Through Complex Adaptive Systems

Samuel Jaffe
Science & Nature

Small differences can lead to large consequences or change outcomes. A popular example of this is that a butterfly could flap its wings in New York and the next day in Tokyo there will be rain instead of sunshine. This phenomenon is commonly known as the ‘Butterfly Effect’ and it highlights the relationship between minute conditions and ending outcomes within a system. Although interesting, the Butterfly Effect is only a piece in the puzzle of understanding our greater world. A larger piece to the puzzle, but by no means the complete picture, are Complex Adaptive Systems (CAS). If the Butterfly Effect represents the relationship in a system, then a CAS is the system itself.

Fixed Foreign Exchange Rate Regime

Fixed Foreign Exchange Rate Regime

Vincent Z. Yu
Finance

There are two major types of foreign exchange regimes: fixed exchange rate policy and floating. As its literal meaning on appearance, a fixed exchange rate is a regime in which a country’s currency exchange rate is tied to the currency of another country or the price of gold. A floating exchange rate policy, instead, gives the currency a much wider range to float without predominant regulatory control. The price of a particular currency in this scenario is almost purely driven by the relative supply and demand of the currency in the foreign exchange market. We will define the exchange rate in our discussion as the rate at which a domestic currency can be converted to one unit of U.S. Dollar, the value of which is assumed unchanged, we will now proceed with our discussion of the fixed-rate system.