Aims and ScopeOptimization has been expanding in all directions at an astonishing rate during the last few decades. New algorithmic and theoretical techniques have been developed, the diffusion into other disciplines has proceeded at a rapid pace, and our knowledge of all aspects of the field has grown even more profound. At the same time, one of the most striking trends in optimization is the constantly increasing emphasis on the interdisciplinary nature of the field. Optimization has been a basic tool in all areas of applied mathematics, engineering, medicine, economics and other sciences.The series Optimization and Its Applications publishes undergraduate and graduate textbooks, monographs and state-of-the-art expository works that focus on algorithms for solving optimization problems and also study applications involving such problems. Some of the topics covered include nonlinear optimization (convex and nonconvex), network flow problems, stochastic optimization, optimal control, discrete optimization, multiobjective programming, description of software packages, approximation techniques and heuristic approaches. Technical University of Crete, Chania, Greece © e+Business Media, LLC All rights reserved. This work may not be translated or copied in whole or in part without the written permission of the publisher (Springer Science+Business Media, LLC, 233 Spring Street, New York, connection with any form of information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now know or hereafter developed is forbidden.
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springer.comThe use in this publication of trade names, trademarks, service marks and similar terms, even if they are ISBN: 978-0-387-76681-2 e-ISBN: 978-0-387-76682-9 DOI: 10.1007/978-0-387-76682-9 ISSN: 1931 To our families
PrefaceFrom the beginning of the 20th century, finance has consolidated its position as a science of major practical importance for corporate entities, firms, organizations, and investors. Over this period finance has undergone significant change keeping pace with the technological innovations that occurred after the World War II and the socio-economic changes that affected the global business environment. The changes in the field of finance resulted in a transformation of its nature from a descriptive science to an analytic science, involved with the identification of the relationship among financial decisions and the decision environment and ultimately to an engineering science, involved with the design of new financial products and the development of innovations with regard to financial instruments, processes, and solutions.This transformation began in the late 1950s with the work of Markowitz on portfolio selection and later, during the 1970s, with the work of Black and Scholes on option pricing. These pioneering works have demonstrated tha...
