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Books > Science & Mathematics > Mathematics > Applied mathematics
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Introduction to Financial Mathematics (Hardcover)
Loot Price: R2,970
Discovery Miles 29 700
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Introduction to Financial Mathematics (Hardcover)
Series: Advances in Applied Mathematics
Expected to ship within 12 - 17 working days
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Introduction to Financial Mathematics is ideal for an introductory
undergraduate course. Unlike most textbooks aimed at more advanced
courses, the text motivates students through a discussion of
personal finances and portfolio management. The author then goes on
to cover valuation of financial derivatives in discrete time, using
all of closed form, recursive, and simulation methods. The text
covers nearly all of the syllabus topics of the Financial
Mathematics Actuarial examination, providing students with the
foundation they require for future studies and throughout their
careers. It begins by covering standard material on the mathematics
of interest, including compound interest, present value, annuities,
loans, several versions of the rate of return on an investment, and
interest in continuous time. The text explains how to value bonds
at their issue dates, at coupon times, between coupon times, and in
cases where the bonds are terminated early. Next, it supplies a
rapid-fire overview of the main ideas and techniques of discrete
probability, including sample spaces and probability measures,
random variables and distributions, expectation, conditional
probability, and independence. The author introduces the basic
terminology of stocks and stock trading. He also explains how to
derive the rate of return on a portfolio and how to use the idea of
risk aversion to model the investor tradeoff between risk and
return. The text also discusses the estimation of parameters of
asset models from real data. The text closes with a detailed
discussion of how to value financial derivatives using
anti-arbitrage assumptions. The one-step and multi-step cases are
covered, and exotic options such as barrier options are also
introduced, to which simulation methods are applied. Many of the
examples in the book involve numerical solution of complicated
non-linear equations; others ask students to produce algorithms
which beg to be implemented as programs. For maximum flexibility,
the author has produced the text without adhering to any particular
computational platform. A digital version of this text is also
available in the form of Mathematica notebooks that contain
additional content.
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