Search icon
Arrow left icon
All Products
Best Sellers
New Releases
Books
Videos
Audiobooks
Learning Hub
Newsletters
Free Learning
Arrow right icon
Python for Finance

You're reading from  Python for Finance

Product type Book
Published in Apr 2014
Publisher
ISBN-13 9781783284375
Pages 408 pages
Edition 1st Edition
Languages
Author (1):
Yuxing Yan Yuxing Yan
Profile icon Yuxing Yan

Table of Contents (20) Chapters

Python for Finance
Credits
About the Author
Acknowledgments
About the Reviewers
www.PacktPub.com
Preface
Introduction and Installation of Python Using Python as an Ordinary Calculator Using Python as a Financial Calculator 13 Lines of Python to Price a Call Option Introduction to Modules Introduction to NumPy and SciPy Visual Finance via Matplotlib Statistical Analysis of Time Series The Black-Scholes-Merton Option Model Python Loops and Implied Volatility Monte Carlo Simulation and Options Volatility Measures and GARCH Index

The power function, floor, and remainder


For our FV=PV(1+R)^n, we use a power function. The floor function would give the largest integer smaller than the current value. The remainder is the value that remains after an integer division. Given a positive discount rate, the present value of a future cash flow is always smaller than its corresponding future value.

The following formula specifies the relationship between a present value and its future value:

In this formula, PV is the present value, FV is the future value, R is the cost of capital (discount rate) per period, and n is the number of periods. Assume that we would receive $100 payment in two years and that the annual discount rate is 10 percent. What is the equivalent value today that we are willing to accept?

>>>100/(1+0.1)**2
82.64462809917354

Here, ** is used to perform a power function. The % operator is used to calculate the remainder. Refer to the following example for the implementation of these operators:

>>...
lock icon The rest of the chapter is locked
Register for a free Packt account to unlock a world of extra content!
A free Packt account unlocks extra newsletters, articles, discounted offers, and much more. Start advancing your knowledge today.
Unlock this book and the full library FREE for 7 days
Get unlimited access to 7000+ expert-authored eBooks and videos courses covering every tech area you can think of
Renews at $15.99/month. Cancel anytime}