Getting agreement between finance theory and finance practice is important like never before. In the last decade the derivatives business has grown to a staggering size, such that the outstanding notional of all contracts is now many multiples of the underlying world economy. No longer are derivatives for helping people control and manage their financial risks from other business and industries, no, it seems that the people are toiling away in the fields to keep the derivatives market afloat (Apologies for the mixed metaphor ) If you work in derivatives, risk, development, trading, etc. you'd better know what you are doing, there's now a big responsibility on your shoulders.

In this second edition of "Frequently Asked Questions in Quantitative Finance" I continue in my mission to pull quant finance up from the dumbed-down depths, and to drag it back down to earth from the super-sophisticated stratosphere. Readers of my work and blogs will know that I think both extremes are dangerous. Quant finance should inhabit the middle ground, the mathematics sweet spot, where the models are robust and understandable, and easy to mend.

...And that's what this book is about.

This book contains important FAQs and answers that cover both theory and practice. There are sections on how to derive Black-Scholes (a dozen different ways ), the popular models, equations, formulae and probability distributions, critical essays, brainteasers, and the commonest quant mistakes. The quant mistakes section alone is worth trillions of dollars

I hope you enjoy this book, and that it shows you how interesting this important subject can be. And I hope you'll join me and others in this industry on the discussion forum on wilmott.com. See you there "

"FAQQF2."..including key models, important formulae, popular contracts, essays and opinions, a history of quantitative finance, sundry lists, the commonest mistakes in quant finance, brainteasers, plenty of straight-talking, the Modellers' Manifesto and lots more.

"Paul Wilmott Introduces Quantitative Finance, Second Edition" is an accessible introduction to the classical side of quantitative finance specifically for university students. Adapted from the comprehensive, even epic, works "Derivatives" and "Paul Wilmott on Quantitative Finance, Second Edition," it includes carefully selected chapters to give the student a thorough understanding of futures, options and numerical methods. Software is included to help visualize the most important ideas and to show how techniques are implemented in practice. There are comprehensive end-of-chapter exercises to test students on their understanding.

In praise of Paul Wilmott and his previous works

Some people write for fame, some for money. Most academics write books to impress the professor down the corridor so that one day they will be the professor down the corridor everyone is trying to impress. Uniquely, Paul Wilmott writes to inform and educate his readers, to convey ideas, and, most importantly, to show them "how to do it,"

His greatest admirers are his readers. So, instead of endorsements from the great and the good, here are the words of his fans. Their sometimes unique spelling has been retained.

I found it to be easily the best book that I have read/worked through on the subject.

I thought it might amuse you to know that I think your book got me a job!

I'd like to say that this is a great book but you already know that!

I'm a junior derivatives trader in Mexico City. I've seen your book and I have only one coment: SEXY!

Loved your book, which is a breath of fresh air, amongst all those arid derivatives books!! It really is in a class of its own. I have wastedso much money on stupid derivative books which too elementary or way too complicated.

Purchased both Quant Finance and Derivatives a couple of days ago. Will not be able to afford steak or wine for weeks as a result.

BTW, I want to congratulate you for the *best* book in Financial Engineering I've read in the last years.

After reading the book I'd like to follow one of your courses, but they are way too expensive.

Congratulations for your brilliant book.

What I like about it is that it has this no-nonsense kind of approach that you'd expect in a physics text and it spells out the "stuff between the equations."

Congratulation to your book Derivatives !!! The way you describe, present, and deliver Derivative knowledge is unique! One can feel your passion on the topic. It's a pleasure to read, study, re-read...

Congratulations on a great new book - 'PW on Quant Finance'. I bought the DERIVATIVES one but cannot afford this one!!

I am fanatical follower of your book "Derivatives." You are best and this not flattery. Sorry from my English!

We use it for the part of our Banking and Risk Management course and it's much more comprehensive than the books that we have recommended in our study guide.

Your book "Derivatives: the Theory and Practice of Financial Engineering" is the best in the market so far.

I shall waste no more precious words but to say that I am very simpathetic to your humor and irony...what most don't always seem to understand: irony is one of the GREAT filters to access knowledge in this world and an elegant one for that matter.

your book rocks.

Congratulations to the success of your book (I got my copy of it for Christmas).

I would like to thank you for writing Derivatives.

Derivatives is the Greatest! Thank you, thank you, thank you! Just read the first 7 chapters of Derivatives, and it speaks to me.

complete, brilliant and amusing, stimulating for some original ideas and examples, didactically ready to be used by Students; it employs mathematical tools as tools only, not as a target; it is the last but the best book on derivatives in my library.

You're book truly struck me as fun, informative and brilliant! Us American would say 'Awesome Dude!!!'

I had a course on derivatives and your book was not suggested by the teacher (a stupid teacher).

Love you for ever, baby. xxx M

The first volume of "Paul Wilmott On Quantitative Finance Second Edition," MATHEMATICAL AND FINANCIAL FOUNDATIONS; BASIC THEORY OF DERIVATIVES; RISK AND RETURN.

In this volume the reader is introduced to the fundamental mathematical tools and financial concepts needed to understand quantitative finance, portfolio management and derivatives. Parallels are drawn between the respectable world of investing and the not-so-respectable world of gambling.

Key chapters in this volume are The Random Behavior of Assets The Black-Scholes Model The Black-Scholes Formulae and the A[EGreeksA[ Early Exercise and American Options How to Delta Hedge Fixed-income Products and Analysis: Yield, Duration and Convexity Swaps The Binomial Model How Accurate is the Normal Approximation? Investment Lessons from Blackjack and Gambling

The author has included numerous Bloomberg screen dumps to illustrate in real terms the points he raises, together with essential Visual Basic code, spreadsheet explanations of the models, the reproduction of term sheets and option classification tables.

In addition to the practical orientation of the book the author himself also appears throughout the book A[ in cartoon form, readers will be relieved to hear A[ to personally highlight and explain the key sections and issues discussed.

A

The second volume of "Paul Wilmott On Quantitative Finance Second Edition," EXOTIC CONTRACTS AND PATH DEPENDENCY; FIXED INCOME MODELING AND DERIVATIVES; CREDIT RISK. I

n this volume the reader sees further applications of stochastic mathematics to new financial problems and different markets.

Key chapters in this volume are

An Introduction to Exotic andPath-dependent Options Derivatives and Stochastic Control Equity and FX Term Sheets One-factor Interest Rate Modeling Empirical Behavior of the Spot Interest Rate The Heath, Jarrow & Morton and Brace, Gatarek & Musiela Models Fixed Income Term Sheets Value of the Firm and the Risk of Default Credit Risk CrashMetrics Derivatives **** Ups

The author has included numerous Bloomberg screen dumps to illustrate in real terms the points he raises, together with essential Visual Basic code, spreadsheet explanations of the models, the reproduction of term sheets and option classification tables.

In addition to the practical orientation of the book the author himself also appears throughout the book A[ in cartoon form, readers will be relieved to hear A[ to personally highlight and explain the key sections and issues discussed.

TheAA third volume of "Paul Wilmott On Quantitative Finance Second Edition," ADVANCED TOPICS; NUMERICAL METHODS AND PROGRAMS.

In this volume the reader enters territory rarely seen in textbooks, the cutting-edge research. Numerical methods are also introduced so that the models can now all be accurately and quickly solved.

Key chapters in this volume are Defects in the Black-Scholes Model Overview of Volatility Modeling Volatility Smiles and Surfaces Stochastic Volatility Uncertain Parameters Empirical Analysis of Volatility Stochastic Volatility and Mean-variance Analysis Volatility Case Study: The Cliquet Option Crash Modeling Static Hedging Interest-rate Modeling Without Probabilities Modeling Inflation Energy Derivatives Real Options Life Settlements and Viaticals Finite-difference Methods for One-factor Models Monte Carlo Simulation and RelatedMethods Numerical Integration and Simulation Methods Finite-difference Programs Monte Carlo Programs

The author has included numerous Bloomberg screen dumps to illustrate in real terms the points he raises, together with essential Visual Basic code, spreadsheet explanations of the models, the reproduction of term sheets and option classification tables.

In addition to the practical orientation of the book the author himself also appears throughout the book A[ in cartoon form, readers will be relieved to hear A[ to personally highlight and explain the key sections and issues discussed.

Run Time: 30.59 minutes Paul Wilmott, one of the world's leading financial mathematicians criticizes popular concepts within economics and quantitative finance both at the big-picture level and in the detail for the benefit of Quantitative Analysts and Risk Managers everywhere: Economists are taking the wrong approach in their models The dangerous inconsistencies in the concept of calibration and the lack of understanding of this technique Universities concentration on teaching a tiny abstract, mostly irrelevant part of mathematics in their finance programmes Recommendations are made for a broader toolbox of mathematics to be made available to finance This video, one of six from the Wiley WILMOTT Summit on Risk and Quantitative Modeling in Finance, held on the 11th December 2012 at Columbia University, New York feature the presentations from thought leaders and industry experts aiming to draw together some of the lessons of the last decade in order to restate the discipline's fundamental role in driving the future success of the global market economy. This is the time to define what quantitative finance really means beyond the fallout of the global financial crisis and to identify the technology and techniques that will power innovation and growth. Videos in this series include: Paul Wilmott - Recent Advances in Stupid Ideas in Quant Finance Kent Osband - Fooled by Rational Turbulence Aaron Brown - And The Cows That Were Ugly and Gaunt Ate Up The Seven Sleek, Fat Cows Patrick S. Hagan - On Beyond Black: Volatility Surfaces and Dark Noise Edward O. Thorp - What Finance Has Taught Me Chaired by Jack Schwager - Wiley Wilmott Summit Debate, Is Finance the sickness or the cure? Joined by Paul Wilmott, Kent Osband, Aaron Brown and Patrick S. Hagan

New ideas in quantitative finance are always welcome, especially so in recent years as new techniques have steadily gained in popularity and old techniques have become more sophisticated.

This book features new contributions from many highly regarded individuals, collected together by Paul Wilmott and Henrik Rasmussen. Subjects featured include new techniques for:

• Risk Management
• Equity Modelling
• Interest Rate Modelling

This book is a worthy addition to the canon of literature on quantitative finance.

November 11th 2003 saw a landmark event take place in London. As the first conference designed for quants by quants the Quantitative Finance Review 2003, moved away from the anonymous bazaars that have become the norm, and instead delivered valuable information to market practitioners with the greatest interest. The roster of speakers was phenomenal, ranging from founding fathers to bright young things, discussing the latest developments, with a specific emphasis on the burgeoning field of credit derivatives. You really had to be there. Until now, at least.
The Best of Wilmott 1: Including the latest research from Quantitative Finance Review 2003 contains these first-class articles, originally presented at the QFR 2003, along with a collection of selected technical papers from Wilmott magazine. In publishing this book we hope to share some of the great insights that, until now, only delegates at QFR 2003 were privy to, and give you some idea why Wilmott magazine is the most talked about periodical in the market.
Including articles from luminaries such as Ed Thorp, Jean-Philippe Bouchaud, Philipp Schoenbucher, Pat Hagan, Ephraim Clark, Marc Potters, Peter Jaeckel and Paul Wilmott, this collection is a must for anyone working in the field of quantitative finance. The articles cover a wide range of topics:
* Psychology in Financial Markets
* Measuring Country Risk as Implied Volatility
* The Equity-to-Credit Problem
* Introducing Variety in Risk Management
* The Art and Science of Curve Building
* Next Generation Models for Convertible Bonds with Credit Risk
* Stochastic Volatility and Mean-variance Analysis
* Cliquet Options and Volatility Models
And as they say at the end of (most) Bond movies The Best of Wilmott... will return on an annual basis.