We all know that the random number generator that comes along in excel is not actually random. If you sample 1000 x coordinates and 1000 y coordinates and draw a scatter plot, you can easily see large gaps where sample points are not picked. Look at the picture below - The first one is from excel function rand() If one is using random numbers a lot in one’s analysis, one has to ignore rand() and go for something else.

Why one should know about pseudo random numbers ? A superb quote below summarizes the need for it : Anyone who considers arithmetical methods of producing random digits is, of course, in a state of sin - John Von Neumann, 1951

A good life doesn’t come from Looking good, Feeling good, Having goods A good life comes from Being good, Doing good - Rick Warren(Purpose Driven Life)

Derman while speaking on Volatility Smiles : Academics in finance departments often think that options theory is a solved problem. In fact, 15 years after the appearance of the smile, we are still in many ways, like the smile, laughing in the dark. There are too many models. When you do research in options, you have to use advanced mathematics. If you are a practitioner you must never forget that you are moving through lawless roads where the local inhabitants don’t respect your customs.

Just thought of doing some thing other than the usual stuff on a dull sunday afternoon :)..Made this cartoon