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Problem of the Week — Brain teasers and word problems for solving. Interactive Fun Puzzles — Fun puzzles for younger students. Select personalised ads. Apply market research to generate audience insights. Measure content performance. Develop and improve products. List of Partners vendors. Boolean algebra is a division of mathematics that deals with operations on logical values and incorporates binary variables.
Boolean algebra traces its origins to an book by mathematician George Boole. The distinguishing factor of Boolean algebra is that it deals only with the study of binary variables. Most commonly Boolean variables are presented with the possible values of 1 "true" or 0 "false". Variables can also have more complex interpretations, such as in set theory. Boolean algebra is also known as binary algebra.
Boolean algebra is different from elementary algebra as the latter deals with numerical operations and the former deals with logical operations. Elementary algebra is expressed using basic mathematical functions, such as addition, subtraction, multiplication, and division, whereas Boolean algebra deals with conjunction, disjunction, and negation. Since its concept has been detailed, Boolean algebra's primary use has been in computer programming languages.
Its mathematical purposes are used in set theory and statistics. Boolean algebra has applications in finance through mathematical modeling of market activities.
For example, research into the pricing of stock options can be aided by the use of a binary tree to represent the range of possible outcomes in the underlying security.
In this binomial options pricing model , where there are only two possible outcomes, the Boolean variable represents an increase or a decrease in the price of the security. This type of modeling is necessary because, in American options, which can be exercised at any time, the path of a security's price is just as important as its final price. The binomial options pricing model requires the path of a security's price to be broken into a series of discrete time ranges.
As such, the binomial options pricing model allows an investor or trader to view the change in the asset price from one period to the next.
This allows them to evaluate the option based on decisions made at different points. How to Solve It: Modern Heuristics. Authors view affiliations Zbigniew Michalewicz David B. Pages Front Matter Pages Basic Concepts.
Traditional Methods — Part 1. Traditional Methods — Part 2. Escaping Local Optima. An Evolutionary Approach.
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