Book Image

Financial Modeling Using Quantum Computing

By : Anshul Saxena, Javier Mancilla, Iraitz Montalban, Christophe Pere
5 (1)
Book Image

Financial Modeling Using Quantum Computing

5 (1)
By: Anshul Saxena, Javier Mancilla, Iraitz Montalban, Christophe Pere

Overview of this book

Quantum computing has the potential to revolutionize the computing paradigm. By integrating quantum algorithms with artificial intelligence and machine learning, we can harness the power of qubits to deliver comprehensive and optimized solutions for intricate financial problems. This book offers step-by-step guidance on using various quantum algorithm frameworks within a Python environment, enabling you to tackle business challenges in finance. With the use of contrasting solutions from well-known Python libraries with quantum algorithms, you’ll discover the advantages of the quantum approach. Focusing on clarity, the authors expertly present complex quantum algorithms in a straightforward, yet comprehensive way. Throughout the book, you'll become adept at working with simple programs illustrating quantum computing principles. Gradually, you'll progress to more sophisticated programs and algorithms that harness the full power of quantum computing. By the end of this book, you’ll be able to design, implement and run your own quantum computing programs to turbocharge your financial modelling.
Table of Contents (16 chapters)
1
Part 1: Basic Applications of Quantum Computing in Finance
5
Part 2: Advanced Applications of Quantum Computing in Finance
10
Part 3: Upcoming Quantum Scenario

Derivatives pricing – the theoretical aspects

Learning the factors that go into setting derivatives pricing is crucial. An in-depth knowledge of financial product pricing is essential to make sound investing decisions, whether you’re on the buying or selling side of the market. After all, knowing how a product’s attributes interact to produce value is necessary to decide what to offer or bid for a financial product. It is crucial to comprehend the price of financial assets. The capital asset pricing model and its variants, based on discounted cash flow, help establish values for financial assets. However, unlike traditional assets such as stocks and bonds, derivatives have their challenges, but they also have several unexpectedly straightforward properties. In the next section, we will discuss the important concept of money’s time value, which forms the basis for securities pricing.

The time value of money

The value of money fluctuates over time. What...