APPLICATION OF MATHEMATICAL MODELING IN FINANCE: A REVIEW

Norazryana Binti Mat Dawi, Ashish Kumar Singh and Hamidreza Namazi
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Norazryana Binti Mat Dawi: 525 West 8th Avenue, Vancouver, BC V5Z1C6, Canada
Ashish Kumar Singh: ��Department of Management, School of Business, Galgotias University, Greater Noida, Uttar Pradesh, India
Hamidreza Namazi: ��School of Engineering, Monash University, Malaysia§Biomedical Signal & Image Processing Lab, Galgotias University, Greater Noida, Uttar Pradesh, India¶Faculty of Engineering and the Built Environment, Durban University of Technology, Durban, South Africa

FRACTALS (fractals), 2025, vol. 33, issue 09, 1-14

Abstract: This review provides a comprehensive synthesis of the evolving role of mathematical modeling in modern finance, spanning traditional stochastic models to cutting-edge applications of machine learning and artificial intelligence. While existing reviews often focus narrowly on specific subdomains such as asset pricing or risk management, this work distinguishes itself by offering an integrated perspective that connects foundational theories with emerging interdisciplinary techniques across six major pillars: asset pricing, risk management, portfolio optimization, financial simulations, machine learning applications, and future challenges. In doing so, the paper fills a critical gap by mapping the convergence of classical mathematical methods with data-driven approaches, offering a roadmap for researchers and practitioners navigating increasingly complex financial systems. By emphasizing both theoretical advancements and real-world applications, this review contributes to the ongoing discourse on building more robust, adaptive, and interpretable financial models in the face of global market uncertainties.

Keywords: Mathematical Modeling; Financial Forecasting; Risk Management; Asset Pricing; Machine Learning (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1142/S0218348X25300119

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