Black Box

The research presented in this book can be applied in either an academic setting or an applied environment.  The main goal is to convey that financial models are predicated on statistical and model assumptions, and that those assumptions can provide pricing failures.  Understanding some of the underlying model components should allow better forecasting and pricing models to be constructed.  The title “Black Box - The Alchemy  of Finance” is fitting these days.  It is the alchemy of statistics and model building that the foundation of modern finance is resting upon.