Search icon CANCEL
Subscription
0
Cart icon
Your Cart (0 item)
Close icon
You have no products in your basket yet
Save more on your purchases now! discount-offer-chevron-icon
Savings automatically calculated. No voucher code required.
Arrow left icon
Explore Products
Best Sellers
New Releases
Books
Videos
Audiobooks
Learning Hub
Conferences
Free Learning
Arrow right icon
Arrow up icon
GO TO TOP
Mastering Python for Finance

You're reading from   Mastering Python for Finance Understand, design, and implement state-of-the-art mathematical and statistical applications used in finance with Python

Arrow left icon
Product type Paperback
Published in Apr 2015
Publisher Packt
ISBN-13 9781784394516
Length 340 pages
Edition 1st Edition
Languages
Arrow right icon
Toc

Table of Contents (12) Chapters Close

Preface 1. Python for Financial Applications FREE CHAPTER 2. The Importance of Linearity in Finance 3. Nonlinearity in Finance 4. Numerical Procedures 5. Interest Rates and Derivatives 6. Interactive Financial Analytics with Python and VSTOXX 7. Big Data with Python 8. Algorithmic Trading 9. Backtesting 10. Excel with Python Index

Incremental search


A crude method of solving a nonlinear function is by doing an incremental search. Using an arbitrarily starting point , we can obtain values of for every increment of . We assume that the values of , , … are going in the same direction as indicated by their sign. Once the sign changes, a solution is deemed as found. Otherwise, the iterative search terminates when it crosses the boundary point .

A pictorial example of the root-finder method for iteration is given in the following graph:

An example can be seen from the Python code:

'''
Python code:
Incremental search method
'''
""" An incremental search algorithm """
import numpy as np
 
 
def incremental_search(f, a, b, dx):
    """
    :param f: The function to solve
    :param a: The left boundary x-axis value
    :param b: The right boundary x-axis value
    :param dx: The incremental value in searching
    :return: The x-axis value of the root,
                number of iterations used
    """
    fa = f(a)    
    c...
lock icon The rest of the chapter is locked
Register for a free Packt account to unlock a world of extra content!
A free Packt account unlocks extra newsletters, articles, discounted offers, and much more. Start advancing your knowledge today.
Unlock this book and the full library FREE for 7 days
Get unlimited access to 7000+ expert-authored eBooks and videos courses covering every tech area you can think of
Renews at $19.99/month. Cancel anytime