Application of Mathematical Equations to Describing Fast Changes in the Assets Prices
14 Pages Posted: 28 Sep 2015
Date Written: September 26, 2015
Price dynamics of the asset depends on the collective action of buyers and sellers, including both institutional and private investors. A large number of diverse, sometimes contradictory, reasons can underlie the decisions of market participants. In certain periods, asset purchases can be a prevailing action, leading to a fast growth of the asset price. Thus, an accelerating price growth occurs.
In natural sciences, any motion or process is determined by the appropriate law described in terms of mathematical equations. This statement raises the questions: whether the financial market is also determined by such laws that hold true throughout certain time periods and whether the mathematical equations can be derived to describe these laws.
Keywords: Price dynamics, asset price, mathematical equations, growth rate
JEL Classification: C00, G12
Suggested Citation: Suggested Citation