Empirical study for uncertain finance

Interest rate, stock and option are all important parts of finance. This paper introduces uncertain differential equation to study the evolution of interest rate and stock price separately. Based on actual observations, we estimate the parameters in uncertain differential equation with the method of moments. Using the introduced interest rate and stock models, we price European options and compare the results pricing with actual observations. Finally, a paradox of the stochastic financial model is stated.

Investment Profitability Analysis for Wind Power Project in Taiwan

In this paper, fuzzy financial evaluation models are derived to analysis investment financial profitability and possibility for wind power generation project in Penghu, Taiwan. The financial subsidy and feed-in tariff (FIT) are two effective market mechanisms to promote wind power development in Taiwan. The performances of the proposed fuzzy profit models are verified by considering their application to a simulation case. The study shows the fuzzy financial indexes of the simulated 2,400 kW wind power project may little uneconomic possibility, with negative net present value, with benefit cost ratio smaller than 1, and with payback years longer than its life span, in both two scenarios. The FIT rates should be revised to match wind power current market to give more attractiveness for potential investors. The studied results are also consistent with those provided by the conventional crisp models, and provide readily implemented possibility analysis tools for use in the arena of uncertain finance.