Matrix Calculator
Matrix A
Matrix B
Result
| Determinant: | |||||||||
Error
Matrix Operations in Finance
Common Financial Applications
- Portfolio optimization and risk analysis
- Markov chains for credit rating transitions
- Linear programming for loan portfolio management
- Covariance matrices for asset correlations
- Transition matrices for mortgage prepayment models
Operation Examples
Matrix Addition:
[1 2] [5 6] [6 8] [3 4] + [7 8] = [10 12]
Matrix Multiplication:
[1 2] [5 6] [19 22] [3 4] × [7 8] = [43 50]
Matrix Dimensions Rules
- • Addition/Subtraction: Matrices must be same size
- • Multiplication: Columns of A = Rows of B
- • Determinant: Only for square matrices
Determinant Significance
The determinant helps determine if a matrix is invertible (non-zero determinant). In finance, this relates to whether a system of equations has a unique solution, important for portfolio optimization and risk modeling.