Cizek, Pavel; Hardle, Wolfgang; Weron, Rafal (Eds.)

Statistical Tools for Finance and Insurance

2005, V, 517 p., Softcover
ISBN: 3-540-22189-1

About this book

Statistical Tools in Finance and Insurance presents ready-to-use solutions, theoretical developments and method construction for many practical problems in quantitative finance and insurance. Written by practitioners and leading academics in the field, this book offers a unique combination of topics from which every market analyst and risk manager will benefit.

Covering topics such as heavy tailed distributions, implied trinomial trees, support vector machines, valuation of mortgage-backed securities, pricing of CAT bonds, simulation of risk processes and ruin probability approximation, the book does not only offer practitioners insight into new methods for their applications, but it also gives theoreticians insight into the applicability of the stochastic technology. Additionally, the book provides the tools, instruments and (online) algorithms for recent techniques in quantitative finance and modern treatments in insurance calculations.

Written in an accessible and engaging style, this self-instructional book makes a good use of extensive examples and full explanations. The design of the text links theory and computational tools in an innovative way. All Quantlets for the calculation of examples given in the text are supported by the academic edition of XploRe and may be executed via XploRe Quantlet Server (XQS). The downloadable electronic edition of the book enables one to run, modify, and enhance all Quantlets on the spot.

Table of contents

Finance: Stable Distributions in Finance (Sz. Borak, W. Hardle, R. Weron).- Tail Dependence (R. Schmidt).- Fuzzy Identification Model (N.A. Achsani, H. Sofyan).- Implied Trinomial Tress (K. Komrad).- Nonparametric Productivity Analysis (W.Hardle, S-O. Jeong).- The Exact LR Test of the Scale in the Gamma Family (M. Stehlik).- Pricing of Catastrophe (CAT) Bonds (K. Burnecki, D. Taylor).- Extreme Value Theory - Modeling and Financial Applications (K. Jajuga, D. Papla).- Long Memory for VOLA Surfaces (R. Deo, W. Hardle).- Correlated Asset Risks and Option Pricing (W. Hardle).

Insurance: Loss Distributions (K. Burnecki, G. Kukla, R. Weron).- Visualization of the Risk Process (P. Mista, R. Weron).- Approximation of Ruin Probability (K. Burnecki, P. Mista, A. Weron).- Deductibles (K. Burnecki, J. Nowicka-Zagrajek, A. Weron).- Net Premiums (K. Brunecki, J. Nowicka-Zagrajek).- Premium Calculation in the Collective Risk Model Framework under Different Models of Dependent Claims (W. Otto).- Stable Levy Motion Approximation in Collective Risk Theory (H. Furrer, Z. Michna, A. Weron).- Diffusion Approximation in Risk Theory (Z. Michna).

David Wells

Prime Numbers: The Most Mysterious Figures in Math

ISBN: 0-471-46234-9
Hardcover
288 pages
May 2005

Description

A fascinating journey into the mind-bending world of prime numbers
Cicadas of the genus Magicicada appear once every 7, 13, or 17 years. Is it just a coincidence that these are all prime numbers? How do twin primes differ from cousin primes, and what on earth (or in the mind of a mathematician) could be sexy about prime numbers? What did Albert Wilansky find so fascinating about his brother-in-law's phone number?

Mathematicians have been asking questions about prime numbers for more than twenty-five centuries, and every answer seems to generate a new rash of questions. In Prime Numbers: The Most Mysterious Figures in Math, you'll meet the world's most gifted mathematicians, from Pythagoras and Euclid to Fermat, Gauss, and Erd?o?s, and you'll discover a host of unique insights and inventive conjectures that have both enlarged our understanding and deepened the mystique of prime numbers. This comprehensive, A-to-Z guide covers everything you ever wanted to know?and much more that you never suspected?about prime numbers, including:

The unproven Riemann hypothesis and the power of the zeta function
The "Primes is in P" algorithm
The sieve of Eratosthenes of Cyrene
Fermat and Fibonacci numbers
The Great Internet Mersenne Prime Search
And much, much more

Table of Contents


Ponte Castaneda, Pedro; Telega, J.J.; Gambin, Barbara (Eds.)

Nonlinear Homogenization and its Applications to Composites,
Polycrystals and Smart Materials
Proceedings of the NATO Advanced Research Workshop, held in Warsaw, Poland, 23-26 June 2003

Series: NATO Science Series II: Mathematics, Physics and Chemistry, Vol. 170
2004, XXI, 355 p.,
Softcover ISBN: 1-4020-2622-6
Hardcover ISBN: 1-4020-2621-8

About this book

Although several books and conference proceedings have already appeared dealing with either the mathematical aspects or applications of homogenization theory, there seems to be no comprehensive volume dealing with both aspects. The present volume is meant to fill this gap, at least partially, and deals with recent developments in nonlinear homogenization emphasizing applications of current interest. It contains thirteen key lectures presented at the NATO Advanced Workshop on Nonlinear Homogenization and Its Applications to Composites, Polycrystals and Smart Materials. The list of thirty one contributed papers is also appended.

The key lectures cover both fundamental, mathematical aspects of homogenization, including nonconvex and stochastic problems, as well as several applications in micromechanics, thin films, smart materials, and structural and topology optimization. One lecture deals with a topic important for nanomaterials: the passage from discrete to continuum problems by using nonlinear homogenization methods. Some papers reveal the role of parameterized or Young measures in description of microstructures and in optimal design. Other papers deal with recently developed methods-both analytical and computational-for estimating the effective behavior and field fluctuations in composites and polycrystals with nonlinear constitutive behavior.

All in all, the volume offers a cross-section of current activity in nonlinear homogenization including a broad range of physical and engineering applications. The careful reader will be able to identify challenging open problems in this still evolving field. For instance, there is the need to improve bounding techniques for nonconvex problems, as well as for solving geometrically nonlinear optimum shape-design problems, using relaxation and homogenization methods.

Table of contents


Akulin, V.M.; Sarfati, A.; Kurizki, G.; Pellegrin, S. (Eds.)

Decoherence, Entanglement and Information Protection
in Complex Quantum Systems
Proceedings of the NATO ARW on Decoherence, Entanglement and Information Protection in Complex Quantum Systems, Les Houches, France, from 26 to 30 April 2004.

Series: NATO Science Series II: Mathematics, Physics and Chemistry, Vol. 189
2005, VI, 703 p.,
Softcover ISBN: 1-4020-3282-X
Hardcover ISBN: 1-4020-3281-1

About this book

This book is a collection of articles on the contemporary status of quantum mechanics, dedicated to the fundamental issues of entanglement, decoherence, irreversibility, information processing, and control of quantum evolution, with a view of possible applications. It has multidisciplinary character and is addressed at a broad readership in physics, computer science, chemistry, and electrical engineering. It is written by the world-leading experts in pertinent fields such as quantum computing, atomic, molecular and optical physics, condensed matter physics, and statistical physics.

Table of contents


Edited By
J. Ferrera / J. Lopez-Gomez / F.R. Ruiz del Portal
Universidad Complutense de Madrid, Spain

Ten Mathematical Essays on Approximation in Analysis and Topology

Description

This book collects 10 mathematical essays on approximation in Analysis and Topology by some of the most influent mathematicians of the last third of the 20th Century. Besides the papers contain the very ultimate results in each of their respective fields, many of them also include a series of historical remarks about the state of mathematics at the time they found their most celebrated results, as well as some of their personal circumstances originating them, which makes particularly attractive the book for all scientist interested in these fields, from beginners to experts. These gem pieces of mathematical intra-history should delight to many forthcoming generations of mathematicians, who will enjoy some of the most fruitful mathematics of the last third of 20th century presented by their own authors.

This book covers a wide range of new mathematical results. Among them, the most advanced characterisations of very weak versions of the classical maximum principle, the very last results on global bifurcation theory, algebraic multiplicities, general dependencies of solutions of boundary value problems with respect to variations of the underlying domains, the deepest available results in rapid monotone schemes applied to the resolution of non-linear boundary value problems, the intra-history of the the genesis of the first general global continuation results in the context of periodic solutions of nonlinear periodic systems, as well as the genesis of the coincidence degree, some novel applications of the topological degree for ascertaining the stability of the periodic solutions of some classical families of periodic second order equations, the resolution of a number of conjectures related to some very celebrated approximation problems in topology and inverse problems, as well as a number of applications to engineering, an extremely sharp discussion of the problem of approximating topological spaces by polyhedra using various techniques based on inverse systems, as well as homotopy expansions, and the Bishop-Phelps theorem.

Key features:

- It contains a number of seminal contributions by some of the most world leading mathematicians of the second half of the 20th Century.

- The papers cover a complete range of topics, from the intra-history of the involved mathematics to the very last developments in Differential Equations, Inverse Problems, Analysis, Nonlinear Analysis and Topology.

- All contributed papers are self-contained works containing rather complete list of references on each of the subjects covered.

- The book contains some of the very last findings concerning the maximum principle, the theory of monotone schemes in nonlinear problems, the theory of algebraic multiplicities, global bifurcation theory, dynamics of periodic equations and systems, inverse problems and approximation in topology.

- The papers are extremely well written and directed to a wide audience, from beginners to experts. An excellent occasion to become engaged with some of the most fruitful mathematics developed during the last decades.

Audience
All mathematicians, from beginners to experts in Analysis, Topology, Differential Equations and Nonlinear Analysis

Contents
Maximum principles and principal eigenvalues (H. Amann). On some approximation problems in topology (A. N. Dranishnikov). Eigenvalues and perturbed domains (J. K. Hale). Monotone approximations and rapid convergence (V. Lakshmikantham). Spectral theory and nonlinear analysis (J. Lopez-Gomez). Approximating topological spaces by polyhedra (S. Mardesic). Periodic solutions in the golden sixties: the birth of a continuation theorem (J. Mawhin). The stability of the equilibrium: a search for the right approximation (R. Ortega). The Bishop--Phelps theorem (R. R. Phelps). An essay on some problems of approximation theory (A. G. Ramm).

Bibliographic & ordering Information
Hardbound, ISBN: 0-444-51861-4, 284 pages, publication date: 2005

Valery Klyatskin

Dynamics of Stochastic Systems

Description

Fluctuating parameters appear in a variety of physical systems and phenomena. They typically come either as random forces/sources, or advecting velocities, or media (material) parameters, like refraction index, conductivity, diffusivity, etc. The well known example of Brownian particle suspended in fluid and subjected to random molecular bombardment laid the foundation for modern stochastic calculus and statistical physics. Other important examples include turbulent transport and diffusion of particle-tracers (pollutants), or continuous densities (''oil slicks''), wave propagation and scattering in randomly inhomogeneous media, for instance light or sound propagating in the turbulent atmosphere. Such models naturally render to statistical description, where the input parameters and solutions are expressed by random processes and fields. The fundamental problem of stochastic dynamics is to identify the essential characteristics of system (its state and evolution), and relate those to the input parameters of the system and initial data. This raises a host of challenging mathematical issues. One could rarely solve such systems exactly (or approximately) in a closed analytic form, and their solutions depend in a complicated implicit manner on the initial-boundary data, forcing and system's (media) parameters . In mathematical terms such solution becomes a complicated "nonlinear functional" of random fields and processes. Part I gives mathematical formulation for the basic physical models of transport, diffusion, propagation and develops some analytic tools. Part II sets up and applies the techniques of variational calculus and stochastic analysis, like Fokker-Plank equation to those models, to produce exact or approximate solutions, or in worst case numeric procedures. The exposition is motivated and demonstrated with numerous examples. Part III takes up issues for the coherent phenomena in stochastic dynamical systems, described by ordinary and partial differential equations, like wave propagation in randomly layered media (localization), turbulent advection of passive tracers (clustering). Each chapter is appended with problems the reader to solve by himself (herself), which will be a good training for independent investigations.

Audience

Researchers in physics (fluid dynamics, optics, acoustics, radiophysics), geosciences (ocean, atmosphere physics), applied mathematics (stochastic equations), applications (coherent phenomena). Senior and postgraduate students in different areas of physics, engineering and applied mathematics.

Contents

Contents Preface Introduction I Dynamical description of stochastic systems 1 Examples, basic problems, peculiar features of solutions 1.1 Ordinary differential equations: initial value problems 1.1.1 Particles under the random velocity field 1.1.2 Systems with blow-up singularities 1.1.3 Oscillator with randomly varying frequency (stochastic parametric resonance) 1.2 Boundary-value problems for linear ordinary differential equations (plane waves in layered media) 1.3 Partial differential equations 1.3.1 Passive tracer in random velocity field 1.3.2 Quasilinear and nonlinear first-order partial differential equations 1.3.3 Parabolic equation of quasioptics (waves in randomly inhomogeneous media) 1.3.4 Navier?Stokes equation: random forces in hydrodynamic theory of turbulence 2 Solution dependence on problem type, medium parameters, and initial data 2.1 Functional representation of problem solution 2.1.1 Variational (functional) derivatives 2.1.2 Principle of dynamic causality 2.2 Solution dependence on problem?s parameters 2.2.1 Solution dependence on initial data 2.2.2 Imbedding method for boundary-value problems Problems 3 Indicator function and Liouville equation 42 3.1 Ordinary differential equations 3.2 First-order partial differential equations 3.2.1 Linear equations 3.2.2 Quasilinear equations 3.2.3 General-form nonlinear equations 3.3 Higher-order partial differential equations 3.3.1 Parabolic equation of quasioptics 3.3.2 Random forces in hydrodynamic theory of turbulence Problems II Statistical description of stochastic systems 4 Random quantities, processes and fields 4.1 Random quantities and their characteristics 4.2 Random processes, fields, and their characteristics 4.2.1 General remarks 4.2.2 Statistical topography of random processes and fields 4.2.3 Gaussian random process 4.2.4 Discontinuous random processes 4.3 Markovian processes 4.3.1 General properties 4.3.2 Characteristic functional of the Markovian process Problems 5 Correlation splitting 5.1 General remarks 5.2 Gaussian process 5.3 Poisson process 5.4 Telegrapher?s random process 5.5 Delta-correlated random processes 5.5.1 Asymptotic meaning of delta-correlated processes and fields Problems 6 General approaches to analyzing stochastic dynamic systems 6.1 Ordinary differential equations 6.2 Completely solvable stochastic dynamic systems 6.2.1 Ordinary differential equations 6.2.2 Partial differential equations 6.3 Delta-correlated fields and processes 6.3.1 One-dimensional nonlinear differential equation 6.3.2 Linear operator equation Problems 7 Stochastic equations with the Markovian fluctuations of parameters 7.1 Telegrapher?s processes 7.2 Gaussian Markovian processes Problems 8 Gaussian delta-correlated random field (ordinary differential equations) 8.1 The Fokker-Planck equation 8.2 Transition probability distributions 8.3 Applicability range of the Fokker?Planck equation 8.3.1 Langevin equation 8.3.2 Diffusion approximation Problems 9 Methods for solving and analyzing the Fokker-Planck equation 9.1 Wiener random process 9.2 Logarithmic-normal random process 9.3 Integral transformations 9.4 Steady-state solutions of the Fokker?Planck equation 9.4.1 One-dimensional nonlinear differential equation 9.4.2 Hamiltonian systems 9.5 Boundary-value problems for the Fokker-Planck equation (transfer phenomena) 9.6 Method of fast oscillation averaging Problems 10 Gaussian delta-correlated random field (causal integral equations) Problems III Examples of coherent phenomena in stochastic dynamic systems 11 Passive tracer clustering and diffusion in random hydrodynamic flows 11.1 Lagrangian description (particle diffusion) 11.1.1 One-point statistical characteristics 11.1.2 Two-point statistical characteristics 11.2 Diffusion of passive tracer concentration in random velocity field 11.3 Effect of molecular diffusion Problems 12 Wave localization in randomly layered media 12.1 Statistics of scattered field at layer boundaries 12.1.1 Reflection and transmission coefficients 12.1.2 Source inside the layer of a medium 12.1.3 Statistical energy localization 12.2 Statistical theory of radiative transfer 12.2.1 Normal wave incidence on the layer of random media 12.2.2 Plane wave source located in random medium 12.3 Numerical simulation Problems Bibliography Index

Bibliographic & ordering Information
Paperback, ISBN: 0-444-51796-0, 212 pages, publication date: 2005