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Genetic Algorithms

The financial definition for Genetic Algorithms:

Models that optimize rules by mimicking the Darwinian Law of survival of the fittest. A set of rules are chosen by those that work the best. The weakest are discarded. In addition, two successful rules can be combined (the equivalent to genetic cross-overs) to produce offspring rules. The offspring can ../../finance-glossary/ the parents, or they will be discarded if less successful than the parents. Mutation is also accomplished by randomly changing elements. Mutation and cross-over occur with low probability, as in nature.






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