## The 17 equations that changed the world

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I sometimes think that the reason Einstein’s equation, E=MC (squared), is so memorable is that in English the sound of the equation, when spoken, has a poetic rhythm to it.

Very interesting list!

–pleased to know I am somewhat familiar with all of them, except the Shannon’s Information Theory equation.

Referencing the Black–Scholes pricing equation— tying it to modern day financial “derivatives” is technically correct, but it is more accurately “famous” for determining the value of Options, which decay in price to zero, as they approach their exercise date.

[“option,” the right but not the obligation, to purchase or sell something at a future date]

–Also credited with being a fundamental concept underlying what morphed into “portfolio insurance.” [key aspect of which is there has to be sufficient numbers of people on the opposite end of any trade, or the “insurance” fails during high & sustained volatility.]

wayne

Black-Scholes determines the theoretical ‘premium value’ of the option, not the total value which may include intrinsic value as well.

Nick P:

Thanks, it’s been a long time since I had any finance-classes!

tangent– what’s the equation tying together energy, frequency & wavelength? (if I’m asking that anywhere nearly correctly.)

You can substitute that into the “e” of e=mc(squared). (That’s about as ‘deep’ with the Maths that I can handle! Always impressed with people that can handle this sort of symbolic logic, Physics or Finance—“fascinating.”)

I think that someone is formulating a new 18th equation that applies to politics and economics.

(CH) Divided by (T) X’s [Balls / Leverage Constant] = EE (Economic Equilibrium)

http://www.reuters.com/article/us-usa-election-china-idUSKCN0ZF17D

Although not yet president someone is already negotiating with China, and they are paying attention.

Too bad biologists have never learned the second law of thermo-

Phill O:

“The law that entropy always increases, holds, I think, the supreme position among the laws of Nature. If someone points out to you that your pet theory of the Universe is in disagreement with Maxwell’s equations — then so much the worse for Maxwell’s equations. If it is found to be contradicted by observation — well, these experimentalists do bungle things sometimes. But if your theory is found to be against the second law of thermodynamics I can give you no hope; there is nothing for it but to collapse in deepest humiliation.”

-Arthur Eddington