Stock Price Evolution
Srdjan D. Stojanovic · Birkhäuser Boston eBooks · 2003
There exists a fundamental difference in investing in risk-free instruments, such as cash accounts discussed in the previous chapter, and risky assets, such as stocks of publicly traded companies. The risk that an investor assumes when investing in stocks has to be understood and taken into consideration. Estimating how much risk is actually taken when investing, deciding in advance how much risk to take when investing, and then according to such a decision how to invest, are some of the central issues in computational financial mathematics.