Neutrosophic Logic Guide to Risk Management Especially Given Stable Pareto Distribution

Abstract

In sciences, it is known that normal distribution is often assumed, but there are fields where kurtosis or skewness effect happens for instance in financial markets. While there are debates on efficient market hypothesis (EMH), from practical view point, there is the black swan hypothesis of Nassim N. Taleb. We shall consider therefore how to consider scale invariance feature of stable Pareto distribution. An outline of Mathematica code has been given, for instance to emphasize Neutrosophic logic guide to risk management principles.