The efficient frontier for financial modelling

There is a trade off between the explanatory powers of a model and its complexity: the more a model explains, the more complex it will be. Would you disagree with that? Before you answer, let me make a claim: Mathematics is about revealing patterns that simplify. The mathematician's work is actually based on producing simplicity, … Continue reading The efficient frontier for financial modelling

The power of notation in problem solving

It's trivial when you think about it: good mathematical notation is one way of making a problem easier to solve. In my introduction to advanced probability theory I put emphasis on how probability theory has developed a clever and natural way to describe the processes we deal with. If you think about it some more, … Continue reading The power of notation in problem solving