The nature of time is one of the most fundamental mysteries of the human experience. The scientific field of physics openly embraces the need to understand time. Social fields like economics and finance have aggressively applied principles from physics into the social models that they create. This form of ‘physics envy’ has generated controversial results. Many feel that the use of physics in finance has been terribly destructive to financial markets and to the evolution of economic theory.
The Financial Infinity Challenge focuses on the way the use of physics in financial theory distorts the variable of time in financial modeling and begs the following questions: Does the financial arrow of time point outward or inward? With financial prices now changing billions of times per day, what is the nature of time within those prices? What is the time in the price for Facebook or Apple stock, oil, or the euro? The time within all financial prices must reside somewhere along the following continuum: