Financial mathematics is an interdisciplinary subject that studies financial markets, financial product pricing and risk management. It uses mathematics, statistics, computer science and other methods to simulate and analyze financial markets. In recent years, with the continuous development and innovation of financial market, the research of financial mathematics has also made remarkable progress.

First of all, financial mathematics has made an important breakthrough in the pricing of financial products. The traditional pricing method of financial products is mainly based on the assumption that the market is completely efficient, but in reality there are often frictions and uncertainties in the market. Therefore, researchers put forward many new pricing models, such as option pricing model and interest rate derivatives pricing model, which can better reflect the actual situation of the market.

Secondly, financial mathematics has also made important progress in risk management. Financial institutions are faced with various risks, such as credit risk, market risk and operational risk. In order to effectively manage these risks, researchers put forward many risk management tools and technologies, such as VaR model and CVA model. These tools and technologies can help financial institutions to better identify, measure and manage risks.

In addition, financial mathematics also plays an important role in the research of behavioral finance in financial markets. Behavioral finance believes that the behavior of investors is influenced by psychological factors, which leads to the deviation of market prices from fundamental values. In order to reveal this behavior law, researchers use psychology, sociology and other multidisciplinary knowledge to model and analyze the financial market.