Preface

Miquel Noguer i Alonso, Daniel Bloch and David Pacheco Aznar

Artificial intelligence (AI) and machine learning are changing all aspects of human life and the way we live and work. AI is being used in a variety of industries to automate tasks, improve efficiency and make better decisions. Some examples of this include large language models, data science applications, self-driving cars, chatbots and medical diagnosis systems. As the technology continues to advance, the potential applications of AI are becoming increasingly diverse and impactful.

The two volumes of this book aim to cover all the relevant aspects of theory and practice of AI in finance. In these volumes we shall explore the use and implementation of AI technologies in different areas of finance, looking specifically at quantitative finance: portfolio management, option pricing and hedging, risk management and retail banking.

Financial engineering has changed as a result of the introduction of machine learning algorithms to implement “traditional” financial engineering models in areas such as returns or alpha prediction, factor modelling, option pricing and hedging and risk management as well as in new areas of research and modelling such as reinforcement learning and natural

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