# Paper on the use of probability theory in finance?

I have taken probability theory course in college and want to see how it is used practically in finance.

What papers should I read? I want it to be not too difficult (undergraduate probability theory course level would be great)

• What about this one: dx.doi.org/10.2307%2F3215299 – Kiwiakos Jun 7 '16 at 22:19
• In my experience, probability theory like risk neutral measure is only used in academic. – HelloWorld Jun 8 '16 at 6:39
• Can you please list some of the topics you've covered: e.g. Probability measures, Lebesgue integration, Ito's lemma, Girsanov's theorem, HJB equation, etc. Probability theory is still a broad topic (not even including statistics!), and can be applied in areas including Monte Carlo applications in financial engineering, interest rate modelling in fixed income, stochastic control in optimisation and HFT, etc. – oliversm Jun 8 '16 at 16:47

## 1 Answer

$\,\,\,$Generally, Finance involve some degree of uncertainty, so we need to use probabilistic reasoning in order to make a sound decision. Nowadays, we need to apply modern probability in each part of finance and this issue is too widespread.However, I introduce some useful articles and books: