Introduction to Financial TechnologyThe financial technology environment is a dynamic, high-pressured, fast-paced world in which developing fast and efficient buy-and-sell order processing systems and order executing (clearing and settling) systems is of primary importance. The orders involved come from an ever-changing network of people (traders, brokers, market makers) and technology. To prepare people to succeed in this environment, seasoned financial technology veteran Roy Freedman presents both the technology and the finance side in this comprehensive overview of this dynamic area. He covers the broad range of topics involved in this industry--including auction theory, databases, networked computer clusters, back-office operations, derivative securities, regulation, compliance, bootstrap statistics, optimization, and risk management—in order to present an in-depth treatment of the current state-of-the-art in financial technology. Each chapter concludes with a list of exercises; a list of references; a list of websites for further information; and case studies.
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From inside the book
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... Compounding A Babylonian treasury strip matures in 10 months with a value of 1 million mannas. Today the purchase price (exclusive of fees and commissions) is 984,375 mannas ... continuous compounding. 54. CHAPTER ♢ 2 Prices, Interest, Time.
Roy S. Freedman. Compounding. Periods. Returns can be compounded for any timescale. For example, suppose the 1year spot ... Continuous. Compounding. What happens when we compound over “infinitely many” periods of “infinitesimally small” time ...
... the future value P1 of an amount P0 that grows at a yearly rate R continuously compounded (over infinitely many periods of infinitesimally small time duration) is just P1 = P0· 1+R+ R2 2+R36+R424+120R5+720R6 = P0 ·eR In T years, the ...
... compounded solution by the series for continuous compounding 1+0 06+ 006 22 +006 63 +006 244 +006 1205 +··· For daily compounding, the real answer (using Excel) is =(1+0.06/365)ˆ365 or $1.061831311. For continuous compounding, the ...
... Babylonian doubling future rate values RC, and — the Tyear yearly compounding the end result — must be rate rate RB, over the Tyear N the same whatever continuously periods compounding RN? Note method we use PT = P0 ·eRC RN T·N N ·T = ...