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BOPM redirects here; for other uses see BOPM (disambiguation) . In finance , the binomial options pricing model (BOPM) provides a generalizable numerical method for the valuation of options . The binomial model was first proposed by Cox , Ross and Rubinstein (1979).

Binomial options pricing model

Entropy (information theory)

In information theory , entropy is a measure of the uncertainty in a random variable . [ 1 ] In this context, the term usually refers to the Shannon entropy , which quantifies the expected value of the information contained in a message. [ 2 ] Entropy is typically measured in bits , nats , or bans . [ 3 ] Shannon entropy is the average unpredictability in a random variable, which is equivalent to its information content . The concept was introduced by Claude E.

Statistical inference might be thought of as gambling theory applied to the world around. The myriad applications for logarithmic information measures tell us precisely how to take the best guess in the face of partial information. [ 1 ] In that sense, information theory might be considered a formal expression of the theory of gambling.

Gambling and information theory

Information theory is a branch of applied mathematics , electrical engineering , bioinformatics , and computer science involving the quantification of information .

Information theory

Latent Dirichlet allocation

In natural language processing , latent Dirichlet allocation (LDA) is a generative model that allows sets of observations to be explained by unobserved groups that explain why some parts of the data are similar. For example, if observations are words collected into documents, it posits that each document is a mixture of a small number of topics and that each word's creation is attributable to one of the document's topics. LDA is an example of a topic model and was first presented as a graphical model for topic discovery by David Blei , Andrew Ng , and Michael Jordan in 2003. [ 1 ]

Value: The Third Factor Of Investing

A stock's valuation is the final factor of the Fama-French three-factor model of investment returns. A stock's valuation is measured on a continuum from "value" to "growth."