The merging of modern computing technology and sophisticated new financial contracts presents outstanding opportunities for academics and businesses alike. For the first time, computational tools are available to explore empirical models of credit risk, apply descriptively accurate micro models to the macro-level pricing structures; and use real-time pricing models for determining taxation and e-commerce policies. In the political and social arena, the events of 9-11-01 constitute new and unknown threats that will have impact on world economy and domestic behavior. Houston has served as the center of the energy-based derivatives market, a market that requires insight provided by sophisticated quantitative tools in risk management and pricing. The motivation for aligning Rice University’s intellectual and technological resources on financial markets lies in the convergence of these circumstances and the lure of better understanding of our world.
A key component of CoFES is the integration of probabilistic and mathematical modeling for complex, multidisciplinary investigations. Rice University brings to this endeavor because an exceptionally bright student body; distinguished faculty in engineering, business and economics; world-class resources in high-performance computing; and an unusually flexible and collegial environment in which to pursue interdisciplinary research and education.