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An Introduction to Stochastic Calculus (2022)

173 pointsby ibobevabout 1 month ago

8 comments

stauntonabout 1 month ago
There&#x27;s are widespread styles of teaching &quot;mathy&quot; subjects that completely ignore mathematical rigor (which is fine).<p>Often a way to do this (which I personally dislike, but it&#x27;s also objectively &quot;fine&quot; teaching and can be done very well) relies on &quot;manipulation of symbols&quot; rather than &quot;manipulation of mathematical objects&quot;. This is a bit like like learning programming in a language that has macros but no functions. Usually, this includes teaching a set of rules (&quot;allowed manipulations&quot;) that allows proving a contradiction, the remedy being that you <i>just don&#x27;t</i>, perhaps by relying on your &quot;intuition&quot; and knowledge of the problem domain (as opposed to just the math), which only comes with experience and isn&#x27;t taught systematically.<p>The style of teaching that I find just intolerable pretends to be doing formal math, keeps telling you that rigor is important, floods you with definitions and terms, and then just does the &quot;macro style of math&quot; anyway, while skipping rigorous theorem statements (let alone proofs) entirely. Unfortunately, I find this article comes pretty close to this style.
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fancyfredbotabout 1 month ago
Apparently this is the key to unlocking vast riches through a career as a derivatives quant. I&#x27;m told it&#x27;s a requirement even though you don&#x27;t really use it on the job. A bit like how you need to rebalance a binary tree to be a web developer.<p>Anyway now it&#x27;s the key to unlocking vast riches through a career as an AI researcher too, seems like a good skill to have.
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FilosofumRexabout 1 month ago
Quant finance (let alone finance) is not math, and should not be studied as such.<p>Browse this excellent &amp; concise book, which starts with a few practical problems to test your math background; if you pass, it&#x27;ll take from Forwards, to Bermudan Swaptions in only about 150 pages!<p>Blyth, S.J. (2013), “An Introduction to Quantitative Finance”<p>Fun factoid - Blyth was the former head of Harvard&#x27;s Endowment and Stats prof. He taught Stat-123 which was a jr level class at Harvard. He&#x27;d put on IR options trades via Bloomberg chat in the middle of his lectures in real time!
skzvabout 1 month ago
I took &quot;Mathematical Methods for Quantitative Finance&quot; from edX, which covered these topics, and found it really rewarding.
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LostMyLoginabout 1 month ago
Does anyone have a solid road map of what to learn to get to the point where learning stochastic calculus is possible? I have a CS degree that was obtained 8-10 years ago. What are the prerequisites?
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pieisgoodabout 1 month ago
In the far past I was also curious about learning Stochastic Calculus. So I asked math stack exchange and got some thoughtful answers that may still be relevant. <a href="https:&#x2F;&#x2F;math.stackexchange.com&#x2F;questions&#x2F;231712&#x2F;where-to-begin-in-approaching-stochastic-calculus" rel="nofollow">https:&#x2F;&#x2F;math.stackexchange.com&#x2F;questions&#x2F;231712&#x2F;where-to-beg...</a>
enthdegreeabout 1 month ago
Great post, &quot;Wiener&quot; is misspelled a few times.
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DrNosferatuabout 1 month ago
If, you assume everything is Gaussian…