In India financial markets have existed for many years. A functionally accented, diverse, efficient and flexible financial system is vital to the national objective of creating a market driven, productive and competitive economy. Today markets of varying maturity exist in equity, debt, commodities and foreign exchange. In this work we attempt to generate prediction rules scheme for stock price movement at Bombay Stock Exchange using an important Soft Computing paradigm viz., Rough Fuzzy Multi Layer Perception. The use of Computational Intelligence Systems such as Neural Networks, Fuzzy Sets, Genetic Algorithms, etc. for Stock Market Predictions has been widely established. The process is to extract knowledge in the form of rules from daily stock movements. These rules can then be used to guide investors. To increase the efficiency of the prediction process, Rough Sets is used to discretize the data. The methodology uses a Genetic Algorithm to obtain a structured network suitable for both classification and rule extraction. The modular concept, based on divide and conquer strategy, provides accelerated training and a compact network suitable for generating a minimum number of rules with high certainty values. The concept of variable mutation operator is introduced for preserving the localized structure of the constituting Knowledge Based sub-networks, while they are integrated and evolved. Rough Set Dependency Rules are generated directly from the real valued attribute table containing Fuzzy membership values. The paradigm is thus used to develop a rule extraction algorithm. The extracted rules are compared with some of the related rule extraction techniques on the basis of some quantitative performance indices. The proposed methodology extracts rules which are less in number, are accurate, have high certainty factor and have low confusion with less computation time.

The outlying property detection problem is the problem of discovering the properties distinguishing a given object, known in advance to be an outlier in a database, from the other database objects. In this paper, we analyze the problem within a context where numerical attributes are taken into account, which represents a relevant case left open in the literature. We introduce a measure to quantify the degree the outlierness of an object, which is associated with the relative likelihood of the value, compared to the to the relative likelihood of other objects in the database. As a major contribution, we present an efficient algorithm to compute the outlierness relative to significant subsets of the data. The latter subsets are characterized in a "rule-based" fashion, and hence the basis for the underlying explanation of the outlierness.

Rule based reasoning (RBR) and case based reasoning (CBR) have emerged as two important and complementary reasoning methodologies in artificial intelligence (Al). For problem solving in complex, real world situations, it is useful to integrate RBR and CBR. This paper presents an approach to achieve a compact and seamless integration of RBR and CBR within the base architecture of rules. The paper focuses on the possibilistic nature of the approximate reasoning methodology common to both CBR and RBR. In CBR, the concept of similarity is casted as the complement of the distance between cases. In RBR the transitivity of similarity is the basis for the approximate deductions based on the generalized modus ponens. It is shown that the integration of CBR and RBR is possible without altering the inference engine of RBR. This integration is illustrated in the financial domain of mergers and acquisitions. These ideas have been implemented in a prototype system called MARS.

This paper describes a natural framework for rules, based on belief functions, which includes a repre- sentation of numerical rules, default rules and rules allowing and rules not allowing contraposition. In particular it justifies the use of the Dempster-Shafer Theory for representing a particular class of rules, Belief calculated being a lower probability given certain independence assumptions on an underlying space. It shows how a belief function framework can be generalised to other logics, including a general Monte-Carlo algorithm for calculating belief, and how a version of Reiter's Default Logic can be seen as a limiting case of a belief function formalism.

This paper describes the incorporation of uncertainty in diagnostic reasoning based on the set covering model of Reggia et. al. extended to what in the Artificial Intelligence dichotomy between deep and compiled (shallow, surface) knowledge based diagnosis may be viewed as the generic form at the compiled end of the spectrum. A major undercurrent in this is advocating the need for a strong underlying model and an integrated set of support tools for carrying such a model in order to deal with uncertainty.

An experiment replicated and extended recent findings on psychologically realistic ways of modeling propagation of uncertainty in rule based reasoning. Within a single production rule, the antecedent evidence can be summarized by taking the maximum of disjunctively connected antecedents and the minimum of conjunctively connected antecedents. The maximum certainty factor attached to each of the rule's conclusions can be sealed down by multiplication with this summarized antecedent certainty. Heckerman's modified certainty factor technique can be used to combine certainties for common conclusions across production rules.

Rather than discussing the isolated merits of a nominative theory of uncertainty, this paper focuses on a class of problems, referred to as Dynamic Classification Problem (DCP), which requires the integration of many theories, including a prescriptive theory of uncertainty. We start by analyzing the Dynamic Classification Problem and by defining its induced requirements on a supporting (plausible) reasoning system. We provide a summary of the underlying theory (based on the semantics of many-valed logics) and illustrate the constraints imposed upon it to ensure the modularity and computational performance required by the applications. We describe the technologies used for knowledge engineering (such as object-based simulator to exercise requirements, and development tools to build the Knowledge Base and functionally validate it). We emphasize the difference between development environment and run-time system, describe the rule cross-compiler, and the real-time inference engine with meta-reasoning capabilities. Finally, we illustrate how our proposed technology satisfies the pop's requirements and analyze some of the lessons reamed from its applications to situation assessment problems for Pilot's Associate and Submarine Commander Associate.

This study examined the effects of "tuning" the parameters of the incremental function of MYCIN, the independent function of PROSPECTOR, a probability model that assumes independence, and a simple additive linear equation. me parameters of each of these models were optimized to provide solutions which most nearly approximated those from a full probability model for a large set of simple networks. Surprisingly, MYCIN, PROSPECTOR, and the linear equation performed equivalently; the independence model was clearly more accurate on the networks studied.

In this paper, we examine the concept of modularity, an often cited advantage of the ruled-based representation methodology. We argue that the notion of modularity consists of two distinct concepts which we call syntactic modularity and semantic modularity. We argue that when reasoning under certainty, it is reasonable to regard the rule-based approach as both syntactically and semantically modular. However, we argue that in the case of plausible reasoning, rules are syntactically modular but are rarely semantically modular. To illustrate this point, we examine a particular approach for managing uncertainty in rule-based systems called the MYCIN certainty factor model. We formally define the concept of semantic modularity with respect to the certainty factor model and discuss logical consequences of the definition. We show that the assumption of semantic modularity imposes strong restrictions on rules in a knowledge base. We argue that such restrictions are rarely valid in practical applications. Finally, we suggest how the concept of semantic modularity can be relaxed in a manner that makes it appropriate for plausible reasoning.

The domain of spare parts forecasting is examined, and is found to present unique uncertainty based problems in the architectural design of a knowledge-based system. A mixture of different uncertainty paradigms is required for the solution, with an intriguing combinatoric problem arising from an uncertain choice of inference engines. Thus, uncertainty in the system is manifested in two different meta-levels. The different uncertainty paradigms and meta-levels must be integrated into a functioning whole. FRED is an example of a difficult real-world domain to which no existing uncertainty approach is completely appropriate. This paper discusses the architecture of FRED, highlighting: the points of uncertainty and other interesting features of the domain, the specific implications of those features on the system design (including the combinatoric explosions), their current implementation & future plans,and other problems and issues with the architecture.