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A quantum mechanical model for the rate of return

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  • Liviu-Adrian Cotfas

Abstract

In their activity, the traders approximate the rate of return by integer multiples of a minimal one. Therefore, it can be regarded as a quantized variable. On the other hand, there is the impossibility of observing the rate of return and its instantaneous forward time derivative, even if we consider it as a continuous variable. We present a quantum model for the rate of return based on the mathematical formalism used in the case of quantum systems with finite-dimensional Hilbert space. The rate of return is described by a discrete wave function and its time evolution by a Schodinger type equation.

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  • Liviu-Adrian Cotfas, 2012. "A quantum mechanical model for the rate of return," Papers 1211.1938, arXiv.org.
    • Handle: RePEc:arx:papers:1211.1938
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    References listed on IDEAS

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    1. Pedram, Pouria, 2012. "The minimal length uncertainty and the quantum model for the stock market," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 391(5), pages 2100-2105.
    2. Mantegna,Rosario N. & Stanley,H. Eugene, 2007. "Introduction to Econophysics," Cambridge Books, Cambridge University Press, number 9780521039871, September.
    3. Liviu-Adrian Cotfas, 2012. "A quantum mechanical model for the relationship between stock price and stock ownership," Papers 1207.3412, arXiv.org, revised Sep 2012.
    4. Pouria Pedram, 2011. "The minimal length uncertainty and the quantum model for the stock market," Papers 1111.6859, arXiv.org, revised Jan 2012.
    5. Zhang, Chao & Huang, Lu, 2010. "A quantum model for the stock market," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 389(24), pages 5769-5775.
    6. Kirill Ilinski, 1997. "Physics of Finance," Papers hep-th/9710148, arXiv.org.
    7. Chao Zhang & Lu Huang, 2010. "A quantum model for the stock market," Papers 1009.4843, arXiv.org, revised Oct 2010.
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