# Mathematical Digest

### Short Summaries of Articles about Mathematics

in the Popular Press

"A Multifractal Walk down Wall Street," by Benoit Mandelbrot.*Scientific American,* February 1999, pages 50-53.

Benoit Mandelbrot is concerned about the risk-reducing formulas in today'sinvestment schemes. They are only correct under unfounded assumptions, such asthe statistical independence of price changes, and they do not take intoaccount large market shifts.

To adequately model financial prices, Mandelbrot claims that we must lookbeyond the classical models. Instead, the study of multifractals, which is anextension of his famous work in fractal geometry, could accurately describe thevolatility inherent in pricing. In this article, Mandelbrot develops hisproposed model and compares realizations of it to real data.

*--- Benjamin Stein*