A Pricing Model Containing Low Order General Differentiable Function In Expected Belief And Empirical Analysis

According to the traditional financial model, consistently think the fundamentalists have a knowledge of the current economical situation, base on this view, expected beliefs of the fundamentalists are tied to the price difference. However, the trend followers don't think so, they only owe the expected beliefs of the trend followers to the studying of the historical price. Therefore, in this text, We add the general function of price difference, and build the asset price model with low order continuous and differentiable general function.Firstly, we take fully use of the theory of difference equation which we have known and taken, and analysis the related behavior of determined model, such as the existence and the stability of equilibrium. Secondly, from the view of our model, we discuss the bifurcation when the general function satisfies low order differential, and when the parameter achieves its criticality. Finally, we give the simply form of general function, and by the simulation and real test, compare the price return charts and the other statistical feature of our model to that of the former one, in order to show our model being better.