3 ms·
So TL;DR the market isn’t as efficient as most would believe it is. That makes sense since the market is ran by humans; but what if it was solely managed by a
by QML 9y ago
So TL;DR the market isn’t as efficient as most would believe it is.
That makes sense since the market is ran by humans; but what if it was solely managed by a computer.
While reviewing for a final, I learned that computers are extremely fast at detecting negative cycles. An application of this? Arbitrage.
If you graph the foreign exchange market with each vertex being a currency and a directed edge being an exchange rate, applying the logarithm operator to each edge and then running a DFS transversal, it would be possible to find paths of arbitration.