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Python for Finance

You're reading from   Python for Finance Apply powerful finance models and quantitative analysis with Python

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Product type Paperback
Published in Jun 2017
Publisher
ISBN-13 9781787125698
Length 586 pages
Edition 2nd Edition
Languages
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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 (17) Chapters Close

Preface 1. Python Basics FREE CHAPTER 2. Introduction to Python Modules 3. Time Value of Money 4. Sources of Data 5. Bond and Stock Valuation 6. Capital Asset Pricing Model 7. Multifactor Models and Performance Measures 8. Time-Series Analysis 9. Portfolio Theory 10. Options and Futures 11. Value at Risk 12. Monte Carlo Simulation 13. Credit Risk Analysis 14. Exotic Options 15. Volatility, Implied Volatility, ARCH, and GARCH Index

Generating random numbers with a seed

Quite often, users want to produce the same set of random numbers repeatedly. For example, when a professor is explaining how to estimate the mean, standard deviation, skewness, and kurtosis of a set of random numbers, it is a good idea that students could generate exactly the same values as their instructor. Another example would be that when we are debugging our Python program to simulate a stock's movements, we might prefer to have the same intermediate results. For such cases, we use the scipy.random.seed() function as follows:

>>>import scipy as sp 
>>>sp.random.seed(12345) 
>>>x=sp.random.normal(0,1,20) 
>>>print x[0:5] 
[-0.20470766 0.47894334 -0.51943872 -0.5557303 1.96578057] 
>>>

Here, 12345 is a seed. The value of the seed is not important. The key is that the same seed leads to the same set of random values. The formula for a more general normal distribution is shown here:

Generating random numbers with a seed

Here, f(x) is the...

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