Can Math Beat Financial Markets?

Wall Street’s wild swings last week helped skew both retirement portfolios and mathematical models of the financial markets. After all, a standard Gaussian function –a bell curve–would predict that such extreme dips and rises would be exceedingly rare and not prone to following one after the other on succeeding days. Gaussian functions might be able to describe the distribution of grades in a big college class, with most students getting, say, B–/C+, and enable you to predict how many students will get A’s or fail.

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Can Math Beat Financial Markets?