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Content archived on 2024-05-27

Topics on probability and convexity in finance

Objective

A multitude of problems that fall under the scope of the field of Financial Mathematics, such as optimal investment and/or consumption, hedging of complex financial instruments, risk management and equilibrium theory, use advanced tools from the theories of Probability (including Stochastic Processes, its dynamic counterpart) and Convex Analysis. This proposal aims to develop further the methods and tools from these areas in order to address in more depth unresolved questions of theoretical and practical importance. Main focus will be given in exploring three areas: (1) Financial equilibria with heterogeneous agents in incomplete markets; (2) Viability of financial models with investment constraints and infinite number of traded assets; and (3) Hedging under model uncertainty.

Versions of all three problems have been the subject of past and current scrutinised study, stemming from a desire to improve the quality of financial modelling, to allow for imperfections that appear in real markets and seek to comprehend them, as well as to address the risk involved with complicated financial positions by exploiting the structure of simple traded assets. Especially the last point is of immediate practical importance, since the field of Financial Mathematics has been criticised exactly for having failed to correctly appreciate the risks associated to introducing financial instruments of vast complexity, the incorrect valuation of which is a major factor that resulted in the recent economic crisis.

Fields of science (EuroSciVoc)

CORDIS classifies projects with EuroSciVoc, a multilingual taxonomy of fields of science, through a semi-automatic process based on NLP techniques. See: https://op.europa.eu/en/web/eu-vocabularies/euroscivoc.

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Topic(s)

Calls for proposals are divided into topics. A topic defines a specific subject or area for which applicants can submit proposals. The description of a topic comprises its specific scope and the expected impact of the funded project.

Call for proposal

Procedure for inviting applicants to submit project proposals, with the aim of receiving EU funding.

FP7-PEOPLE-2012-CIG
See other projects for this call

Funding Scheme

Funding scheme (or “Type of Action”) inside a programme with common features. It specifies: the scope of what is funded; the reimbursement rate; specific evaluation criteria to qualify for funding; and the use of simplified forms of costs like lump sums.

MC-CIG - Support for training and career development of researcher (CIG)

Coordinator

LONDON SCHOOL OF ECONOMICS AND POLITICAL SCIENCE
EU contribution
€ 100 000,00
Address
Houghton Street 1
WC2A 2AE London
United Kingdom

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Region
London Inner London — West Westminster
Activity type
Higher or Secondary Education Establishments
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Total cost

The total costs incurred by this organisation to participate in the project, including direct and indirect costs. This amount is a subset of the overall project budget.

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