A quantum mechanical model for the rate of return
General Finance
2014-12-12 v1 Mathematical Physics
math.MP
Quantum Physics
Abstract
In their activity, the traders approximate the rate of return by integer multiples of a minimal one. Therefore, it can be regarded as a quantized variable. On the other hand, there is the impossibility of observing the rate of return and its instantaneous forward time derivative, even if we consider it as a continuous variable. We present a quantum model for the rate of return based on the mathematical formalism used in the case of quantum systems with finite-dimensional Hilbert space. The rate of return is described by a discrete wave function and its time evolution by a Schodinger type equation.
Keywords
Cite
@article{arxiv.1211.1938,
title = {A quantum mechanical model for the rate of return},
author = {Liviu-Adrian Cotfas},
journal= {arXiv preprint arXiv:1211.1938},
year = {2014}
}