How Dynamical Systems Help Businessman Turn Math into Money

In mathematics, a dynamical system is a system in which a function describes the time dependence of a point in an ambient space. Systems of differential equations excel in describing the ever evolving world around us. One such way that humans have made use of differential equations is in the world of finance. Used extensively in Quantitative Analysis, differential equations can help us model the fluctuating nature of equity markets, help predict stock prices, and help understand market volatility. One of the key models of finance: the Black-Scholes model makes use of a system of partial differential equations to help calculate the fair price of an option. In this project we will be deep diving into the Black-Scholes model, and how financiers turn math into money.