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Python for Finance

You're reading from   Python for Finance If your interest is finance and trading, then using Python to build a financial calculator makes absolute sense. As does this book which is a hands-on guide covering everything from option theory to time series.

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Product type Paperback
Published in Apr 2014
Publisher
ISBN-13 9781783284375
Length 408 pages
Edition 1st Edition
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Author (1):
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Yuxing Yan Yuxing Yan
Author Profile Icon Yuxing Yan
Yuxing Yan
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Table of Contents (14) Chapters Close

Preface 1. Introduction and Installation of Python FREE CHAPTER 2. Using Python as an Ordinary Calculator 3. Using Python as a Financial Calculator 4. 13 Lines of Python to Price a Call Option 5. Introduction to Modules 6. Introduction to NumPy and SciPy 7. Visual Finance via Matplotlib 8. Statistical Analysis of Time Series 9. The Black-Scholes-Merton Option Model 10. Python Loops and Implied Volatility 11. Monte Carlo Simulation and Options 12. Volatility Measures and GARCH Index

Performing array operations with +, -, *, /


Plus and minus for an array would have their normal meaning. However, multiplication and division have quite different definitions. Using multiplication as an example, A × B arrays could have two meanings: either item by item (A and B should have the same dimensions, that is, both are n by m) or matrix multiplication (the second dimension of A should be the same as the first dimension of B, that is, A is n by m while B is m by p ).

Performing plus and minus operations

When adding or subtracting two arrays, they must have the same dimensions, that is, both are n by m. If they have different dimensions, we will get an error message. The following example shows the summation of two cash flow arrays:

>>>cashFlows_1=np.array([-100,50,20])
>>>cashFlows_2=np.array([-80,100,120])
>>>cashFlows_1 + cashFlows_2
>>>array([-180, 150, 140])

Performing a matrix multiplication operation

For matrix multiplication, matrices A and...

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