A. Questions for Submission

10.1 Stock Market Crashes

1. What is the `new information' view of stock market crashes?
2. Describe log-normal power technique for predicting stock market crashes.
3. Why would such a prediction procedure be impossible on the classic random-walk approach to finance?

10.2 Laws of Finance

1. What is John Roberts' argument against laws in the social sciences?
2. Given an example of a model studied in this class. Does it provide evidence for or against Roberts' view? Explain.

 

B. For Further Thought (No Submission)

• In what sense are stock markets like viral videos? In what senses are the two analogous?
• What other systems can you imagine might be interestingly modeled using the log-normal power law approach?
• Is it the case that anything is possible in financial markets? What might an appropriate candidate for a law-like statement be, if any?