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The fuzzy mathematics of finance. (English) Zbl 0613.90017

The author proposes an alternative... to using exact numbers for interest rates, cash amounts, and time periods in elementary financial calculations. The alternative is to use fuzzy numbers for interest rates and cash amounts and a positive discrete fuzzy set for the duration of an investment. The author discusses the future value, the present value of fuzzy cash amounts using a fuzzy interest rate. He shows that the popular internal rate of return procedure does not generalize to fuzzy net cash flows.
Reviewer: M.Matloka

MSC:

91G80 Financial applications of other theories
03E72 Theory of fuzzy sets, etc.
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References:

[1] Buckley, J. J., Ranking alternatives using fuzzy numbers, Fuzzy Sets and Systems, 15, 21-31 (1985) · Zbl 0567.90057
[2] Buckley, J. J.; Fleck, R. A., Determining the number of internal rates of return, Computer J, 21, 373-377 (1978)
[3] Dubios, D.; Prade, H., Fuzzy Sets and Systems (1980), Academic Press: Academic Press New York · Zbl 0444.94049
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