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FEATURE ARTICLE

The New Science of Finance

The study of how people acquire and invest money has a number of intriguing links with the more traditional scientific disciplines

Don Chance, Pamela Peterson

Figure 1. Modern techniques of financeClick to Enlarge Image

The quantitative study of how people acquire and invest their money borrows a great deal from the hard sciences. The authors, two professors of finance, explain the many connections between their relatively young discipline and the more traditional fields of mathematics and physics. They also describe their research on the pricing of certain complex financial instruments and on testing the efficiency of financial markets.


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