Quantitative finance "not a theory", says Derman

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Quantitative finance does not constitute a full theory, but rather a collection of models, according to Emanuel Derman, professor of professional practice at Columbia University and a former senior Goldman Sachs quantitative analyst.

In contrast to theories such as quantum mechanics, which attempt to make exact predictions about the world, modern quantitative finance comprises models that use analogies with physics to price securities, says Derman.

"I used to believe in it as a theory, like

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