Trillion Dollar Bet Essay Example | Topics and Well Written Essays - 750 words

Trillion Dollar Bet - Essay Example Quantitative finance is still a huge part of institutional investing, but despite that fact there are still those traders who feel that it is used too much. This in the end creates a certain amount of hostility between the "rocket scientists" or "quants" and the "intuitive" traders who depend only minimally on mathematics. What is interesting, and also unfortunate about this tension, is that no one has really conducted a study that would shed light on which approach is more optimal in terms of making money for either individual investors or financial institutions. Such a study would be fascinating, and would give much needed and incredibly valuable information on trading strategies. The viewer is given the opportunity to learn of the attempts that have been made to find a mathematical formula for risk, which after some decades of research has finally been achieved by Myron Scholes and Fisher Black, with important contributions as well from Robert Merton. The 'Black-Scholes equation' is now ubiquitous in financial engineering, and as the program mentions, is greatly used in trading pits to estimate the price of an option. This part of the program is actually very interesting, for it discusses the historical origins of quantitative finance, in looking at the thesis of Louis Bechalier. ... For example, the factors which lead LTCM to go into liquidation are not immediately known. The viewer is also led to believe that the LTCM organization, through its vast positioning, aggravated the financial turmoil at that time. With the unknown reasoning behind the ultimate liquidation, any such conclusions or statements first should go through serious research before any final decision is made. No evidence for this is given in the program, and also many of the guests reflect a certain bias against quantitative finance. Bias on any topic can lead to an unfortunate sense of crucial facts being potentially ignored in favor of siding with a popular idea(s). For starters, one of the guests on the program, Stan Jonas of FINAT Brothers, makes reference to a collection of people who a consumer would want to "manage their money." In the end, who are these people and what justifies imputing to them this rare ability Also what is their track record in investment Do they consistently make money, and is this consistency verifiable to an external observer It is these questions which are truly important, and is imperative to ask in order to have a fully well rounded understanding of the subject matter that is being assessed. Sadly, Jonas does not give any names or examples unfortunately, and his statements do reflect to an already mentioned degree of bias against the practice of mathemati cal modeling in finance. Such a bias in and of itself is not necessarily bad, but a reader who is really interested in studying the difference in efficacious between trading strategies, i.e. maybe between those that exploit complex mathematics and those that do not, will not gain anything from Jonas' statements. Such

Ethics and Law Coursework Example | Topics and Well Written Essays - 500 words

Ethics and Law - Coursework Example According to Williams, law includes the codes of conducts that are developed and made obligatory by the authority for every member of the society or a particular group, state or community (p 51). The state sets punishments that are meted on individuals who contravene the codes of conduct. Laws are supposed to be adhered to regardless of their ethical connotation. A law abiding citizen enjoys his/her freedom regardless of whether the laws are suppressive. In other words, development of state laws is independent of the ethics. Ethics on the other hand is concerned with human behavior. It is about how people conduct themselves in the presence or absence of others. Tingle and Cribb view ethics as the moral values against which humans evaluate behavior (p 66). Generally, humans evaluate ethical behavior on the basis of doing to others what they would like to be done to them. This means that if a person hurts another, that is unethical because he/she would not like the same to occur to him /her. In contrast, the law seeks to protect the rights of individuals and the general public based on a common understanding of what is good for them. For example, a government sets laws to protect the rights and freedoms of its citizens, which may not be granted in another state. An officer in the public service is a servant of the state and hence the government. He/she is required to demonstrate professional ethics while undertaking his/her duties. On the other hand, he is obligated to the statutory duties that surpass his/her moral background. He/she is supposed to perform his/her duties according to the laws that govern the particular field. For example in some states, a parent who is convicted of dealing or using illegal drugs is denied parenting rights. The child or children are adopted as the parent serves the prison sentence. The judge who takes away parenting rights is guided by the