Johannes Voit

This highly praised introductory treatment describes the parallels between statistical physics and finance - both those established in the 100-year long interaction between these disciplines, as well as new research results on financial markets. The random-walk technique, well known in physics, is also the basic model in finance, upon which are built, for example, the Black-Scholes theory of option pricing and hedging, plus methods of portfolio optimization. Here the underlying assumptions are assessed critically. Using empirical financial data and analogies to physical models such as fluid flows, turbulence, or superdiffusion, the book develops a more accurate description of financial markets based on random walks. With this approach, novel methods for derivative pricing and risk management can be formulated. Computer simulations of interacting-agent models provide insight into the mechanisms underlying unconventional price dynamics. It is shown that stock exchange crashes can be modelled in ways analogous to phase transitions and earthquakes, and sometimes have even been predicted successfully. This third edition of "The Statistical Mechanics of Financial Markets" especially stands apart from other treatments because it offers new chapters containing a practitioner's treatment of two important current topics in banking: the basic notions and tools of risk management and capital requirements for financial institutions, including an overview of the new Basel II capital framework which may well set the risk management standards in scores of countries for years to come.

When you are in Shanghai, visit Songjiang! Songjiang is terra incognita for most people living outside Shanghai, and even for many Shanghaiese. However, it is the cradle of the global metropolis Shanghai, and of Shanghai Culture. Today a city and a southwestern district of Shanghai, Songjiang was populated more than five thousand years ago when the area of modern-day Shanghai still was covered by water. Songjiang combines the old and the the Sutra Stele is the oldest object above the surface of the earth in the greater Shanghai area, and the spectacular Guangfulin Ancient Relics Site opened in Songjiang in 2018 is the latest addition to Shanghai visitors’ must-see list. The Guangfulin Culture Museaum traces more than five thousand years of history of Songjiang and Shanghai in an awesome, tent-like building rising from the waters of an artificial lake.This book describes both the rich cultural heritage of Songjiang which can be visited today, like Zuibaichi and Fangta Parks, Dacang Bridge, Xilin and Dong Yue Temples, the Sutra Stele and the Mosque, and many of the modern additions such as the InterContinental Shanghai Wonderland Hotel, the Guangfulin Relics Park, the Film Park, and many more. Most importantly, it provides detailed descriptions of how to get there by public transport.

Statistical Mechanics of Financial Markets by Voit, Johannes. . Springer, 2005 .