Vectors and Matrices

Document Type

Book Chapter

Publication Title

Indian Statistical Institute Series

Abstract

In financial analysis we are often dealing with multiple securities, like stocks, bonds, options, etc. There are also multiple market scenarios to consider like recession, boom, growth, stable state, etc. Corresponding to each of these, there are different prices that we need to consider. Relations between these quantities can be explored conveniently using vectors, matrices, and linear algebra. So we recall some linear algebra in this chapter and discuss the associated numerical methods. The first thing that we shall consider is the space spanned by k vectors { u1, …, uk} in E. This space is the collection of all linear combinations ∑i=1kaiui where ai∈ R. We are interested in the dimension of this vector space, that is the maximum number of linearly independent vectors in the collection { u1, …, uk}.

First Page

15

Last Page

24

DOI

10.1007/978-981-19-2008-0_2

Publication Date

1-1-2023

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