Pg 455 Freewrite.

The current financial theories emerged from the progress we have made in physics. The law of thermodynamics and elementary mathematical manipulations of infinite series have proven to drastically affect finance. I believe that new financial options are allowed to be created because of post war economic stability that was brought on by the conclusion of World War II. The Great Depression was the result of a stock market failure and I believe the depression created great scrutiny on financial trading. With new interest or scrutiny is placed on a subject, Americans have a tendency to create new methods to understand the subject.

“Much of the quantitative work in finance seeks to establish the value of new and oftentimes complex derivatives” (Beedles 452). Finance has begun to evolve mathematically and I believe that another reason for this is because of the scientific breakthroughs. Instead of relying on religion to explain such things as planetary movements, Einstein and others sought to explain the world via science. The new quest to explain the world in terms of science has led to many discoveries in the science field. However, I believe that too much faith has been placed on these mathematical finance theories.

“The study of finance as scientific entity is relatively new” (Beedles 451). The fact of the matter is that we have not been able to scrutinize financial tendencies long enough to have any definitive theories. All of the theories that are in place explain how the finance market runs currently but we do not know how it will continue to run definitively. “Insider training is a problem that runs rampant in the financial market” (Beedles 453). I believe that the extensive market analysis that has been conducted so far was only done so people could extort the market. However, as more people begin to analyze the market and more time passes, we will be able to create more accurate, effective market models.