bridges vol. 11, September 2006 / Institutions & Organizations
by Josef Teichmann

When you think of pushing a wheel of fortune you probably imagine a fancy prize like a bag full of money or a cruise through the Caribbean Sea. But would you ever think of Financial Mathematics? Most of us would not. But the job of a Financial and Actuarial Mathematician offers a wide range of possibilities. In addition to the rather classical part of this discipline, the calculation of life insurance, exciting fields of activity have been arising: risk management for markets in banking and credit, consulting in the field of capital investments, actuarial calculations for pension funds, definition of insurance charges, asset-liability-management, or developing investment strategies for the stock exchange regarding interest rates.

Financial Mathematics is a flourishing area of modern science, applying profound knowledge of pure mathematics to problems of financial economics. In general, profits and losses (as well as their distributions) on the stock exchange are not known in advance and, therefore, investment strategy decisions are challenging tasks. The "wheel of fortune" of the Research Unit of Financial and Actuarial Mathematics at the Vienna University of Technology (TU Vienna) offers a simple framework to design such investment strategies.

The work of the research group at TU Vienna is one of the outstanding examples of how fundamental research and practical applications can be successfully combined. Josef Teichmann, a young scientist within this research group who was recently awarded the Austrian START-Prize, explains in the following article the work and the ambitions of the institute.